UK Budget Adjustments Raise Machine Games Duty While Business Rates Loophole Emerges for Certain Venues

The recent UK budget increased Machine Games Duty on slot machine takings from 20% to 25%, and adult gaming centres lost access to specific business rates discounts previously available to leisure and hospitality venues, according to records examined in November 2026.

These shifts affect operators across the high street, yet hundreds of venues continue to hold bingo licences that may allow them to sidestep the rates adjustments through existing regulatory structures.

Details of the Duty Increase and Its Scope

Machine Games Duty applies directly to takings from gaming machines, and the rise to 25% took effect as part of broader fiscal measures announced by the Chancellor. Operators of slot machines in adult gaming centres now calculate payments at the higher rate on all relevant revenue, which alters cash flow planning for businesses that rely heavily on these devices. Data from the Gambling Commission shows thousands of machines operating under this duty category nationwide, with concentrations in urban high street locations.

Adult gaming centres, often referred to as slot farms in industry discussions, faced additional pressure when eligibility ended for business rates relief tied to leisure and hospitality classifications. Local authorities apply these rates based on venue categorisation, and the removal means full liability now applies without the previous reductions. Companies operating multiple sites track these costs closely because they represent a fixed overhead that does not fluctuate with customer volume.

The Bingo Licence Loophole Identified in Records

Analysis of Gambling Commission records reveals that many venues operated by firms such as Merkur and Admiral maintain bingo licences even though slot machines form the primary activity on their floors. These licences place the sites in a different regulatory category for business rates purposes, allowing continued access to discounts that leisure and hospitality venues lost under the budget changes. Hundreds of such high street locations fall into this group, creating a distinction between venues based solely on licence type rather than actual machine mix or customer usage patterns.

Venues with bingo licences operate under rules that permit a limited number of slot machines alongside traditional bingo offerings, yet records indicate many prioritise machine areas while retaining the licence. This structure stems from earlier licensing frameworks that did not anticipate the current scale of machine-focused operations in some locations. The distinction means those sites avoid the full impact of the rates adjustment that applies to standard adult gaming centres without bingo authorisation.

Calls to Address the Regulatory Distinction

Labour MP Alex Ballinger and additional parliamentary voices have called on the government to examine and close the distinction during ongoing licensing consultations. These consultations review how different licence types interact with tax and rates policies, and participants seek alignment so that similar operational models face equivalent obligations. Records show the affected venues cluster in certain regions, which draws attention to how licence categories influence local authority revenue collection.

Government departments track venue classifications through the Gambling Commission database, which lists licence details for each premises. Updates to these records occur when operators apply for changes or renewals, providing a mechanism for future adjustments if policy shifts occur. The current situation leaves the distinction intact until any consultation outcomes lead to revised guidance or legislation.

Operational Context for Affected Companies

Companies like Merkur and Admiral manage portfolios that include both bingo-licensed and non-bingo sites, requiring separate accounting for rates and duty across their estates. Staff at these locations handle compliance with machine limits tied to each licence type, while management monitors how the duty increase affects overall profitability. Industry submissions to consultations often include data on machine numbers, average takings, and employment figures to illustrate scale.

Local authorities process business rates bills based on the information supplied by operators and verified through regulatory filings. When a venue holds a bingo licence, the rates calculation follows the associated category even if daily activity centres on machines. This separation originates in the licensing system established under previous gambling legislation, which set different conditions for bingo halls compared with dedicated adult gaming centres.

Conclusion

The budget measures on Machine Games Duty and business rates relief apply uniformly to qualifying venues, yet the presence of bingo licences creates a documented pathway for certain high street operators to maintain prior rates treatment. Records from the Gambling Commission underpin the identification of these sites, and ongoing consultations provide the forum where adjustments to licence categories or rates rules may receive consideration. Observers continue to monitor how these fiscal changes interact with the existing regulatory framework through November 2026 and beyond.