£100 in five minutes: inside Britain’s slot farms facing tax rise

By Amara Osei

A £100 cash loss vanished in about five minutes in The Guardian’s undercover test of a high-speed category B3 terminal. The last of five £20 notes disappeared into the machine as The Verve’s “Bittersweet Symphony” played over the shop’s sound system.

The Guardian’s test took place among the “slot farms” that dominate Peterborough’s shopping streets. The test left one reward: a free KitKat, an incentive staff use to keep customers playing longer.

At lunchtime on a Thursday, dozens of customers in Peterborough were feeding cash into terminals and cursing as their money disappeared. The pattern extends beyond that city.

The Guardian reported that gamblers in Great Britain lost £2.7bn on slot machines last year, nearly double the annual budget of the Department for Culture, Media and Sport, which oversees the sector.

What changed in the budget?

In his inaugural budget this week, Chancellor John Healey raised “machine games duty,” the tax on slot machines, from 20% to 25%. Healey said the change would bring in nearly £150m a year, “raising taxes on gambling to support good growth on every high street.”

How do the machines drive losses?

Category B3 terminals are the UK’s most popular slot machines. They allow a £2 stake every 2.5 seconds and offer a jackpot of up to £500; The Guardian lost £100 on one machine in five minutes.

Each machine earns £40,000 a year on average, more than the median pay of a British worker, The Guardian reported. Operators place them in bookmakers, casinos and bingo halls, but adult gaming centres, or AGCs, pack the greatest number of machines into premises branded as “slot farms.”

Why are AGCs expanding?

AGCs have spread across almost every British high street and cluster disproportionately in poorer areas, The Guardian reported. On one Peterborough shopping stretch, nearly every shop is a bookmaker or an AGC.

Admiral and Merkur are by far the two largest AGC operators. Admiral is owned by an Austrian billionaire, while Merkur is owned by a German billionaire; both companies have targeted the UK for growth in recent years.

What fuels the controversy?

Andy Burnham, a critic of AGCs, accused them of “targeting some of the most vulnerable in our communities.” Merkur was fined £100,000 in 2025 after The Guardian revealed that it allowed an older woman with terminal cancer to rack up huge losses across two spells lasting 16 hours.

The Guardian reported that critics associate slot machines with higher rates of problem gambling than products such as sports betting. Critics also point to practices that appear designed to keep punters playing and losing.

How do venues keep customers playing?

Most AGCs operate 24 hours a day, extending customers’ opportunities to keep playing. The Guardian has previously reported that staff bonuses are linked to customer losses, undermining staff incentives to intervene when customers develop a gambling problem.

Shops are also adding “super slot” machines, with staff using the format to keep punters playing:

• A comfortable armchair and an immersive 65-inch screen.
• Drinks and snacks from staff, regular prize draws and “free spin” offers.
• Cash withdrawals from a bank without leaving the shop.

Some punters play more than one machine simultaneously. Admiral introduced a two-machine limit, which it says is designed to reduce harmful gambling.

How do slot farms obtain licences?

Many AGCs operate under bingo licences, a route that may sound more benign to local authority planning committees. In practice, most have one bingo machine that is rarely used, if ever.

Can punters win?

A player can win up to £500 on a one-off basis, and The Guardian occasionally won during tests that it said would donate winnings to charity. Each game has a fixed “return to player,” meaning regular slot machine players will always lose over time.

That predictability makes slots a valuable source of income for operators and a logical target for taxation. Gambling-harm experts cited by The Guardian consider the products dangerous.

Who bears the tax increase?

Bookmakers say the tax rise will cost them money and lead to shop closures. Entain, which owns Ladbrokes, expects a £25m hit.

The Guardian reported that shares in three listed slot machine operators rose sharply after the budget: Entain, William Hill owner Evoke and Grosvenor Casinos owner Rank Group. Relieved investors had feared Healey would choose a 40% duty.

Healey also excluded AGCs and vape shops from business rates relief, costing the two sectors a combined £10m. The Guardian concluded that AGCs appeared well placed to thrive because of their low overheads and 24-hour opening, even as bookmakers warned of closures.

What do operators say?

Neither Admiral nor Merkur responded to a request for comment. Bacta, the slot machine trade body, said its members’ venues were “among the safest places to gamble, with experienced staff on hand to identify problems and provide support to customers.”

Bacta added: “Player protection is central to our approach, and machines in AGCs are designed with inbuilt tools to encourage safe play, facilitate self-exclusion and help prevent problem gambling.” The statement made player protection its principal response to problem-gambling concerns.

Bacta said games in its venues are “low-stake – costing as little as 10p a spin” and described its businesses as “a longstanding part of the high street for decades.” It said they provide “low-stake entertainment, local jobs and a boost to local economies.”

It said: “AGCs tend to open on high streets where there is already footfall, alongside other hospitality and leisure venues, and where planning and licensing permissions allow.” The trade body cited footfall and existing permissions as the basis for that model.

Bacta called its members’ licensing regime “one of the most tightly regulated licensing regimes in the world.” It