The last of five £20 notes disappears into the slot machine as The Verve’s Bittersweet Symphony plays over the shop’s sound system.
That’s it, £100 gone in the space of about five minutes, swallowed up by one of the many “slot farms” that dominate the shopping streets of Peterborough.
All that’s left to show for it is a free KitKat, one of the incentives staff use to tempt customers into staying a little longer and losing a little more.
It’s lunchtime on a Thursday and dozens of glassy-eyed hopefuls are having the same experience, feeding in what little cash they have and cursing as it disappears.
The same pattern is repeated across the country. 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.
In his inaugural budget this week, the chancellor, John Healey, took direct aim at slot machines by raising “machine games duty”, the tax levied on them, from 20% to 25%. This, he said, would bring in nearly £150m a year, “raising taxes on gambling to support good growth on every high street”.
But what is the reality of Britain’s booming slot machine industry and why is it in the government’s crosshairs?
What are slot machines?
The most popular machines in the UK are so-called category B3 terminals. They allow you to stake £2 every 2.5 seconds for a jackpot of up to £500. A £2 maximum stake may not sound like a lot but losses can stack up quickly. In this test, £100 is gone in just five minutes.
That’s one reason why each machine earns £40,000 a year on average, more than the median pay of a British worker. Slot machines are found in bookmakers, casinos and bingo halls but the venues that really pack them are adult gaming centres (AGCs), sometimes known as slot farms.
How are AGCs making their money?
They’re on pretty much every British high street, disproportionately in poorer areas. On some, such as this stretch in Peterborough, almost every shop is a bookmaker or an AGC.
By far the two biggest AGC operators are Admiral, which is owned by an Austrian billionaire, and Merkur, owned by a German billionaire. Both have targeted the UK for growth in recent years.
Why are AGCs controversial?
AGCs have their critics, including Andy Burnham, who has accused them of “targeting some of the most vulnerable in our communities”. Notable examples include when Merkur was fined £100,000 in 2025, after the Guardian revealed it had allowed an older woman with terminal cancer to rack up huge losses over two spells lasting 16 hours.
As well as the potential for rapid losses, the machines are associated with higher rates of problem gambling than products such as sports betting. Critics also point to practices apparently designed to keep punters playing and losing. For a start, the majority of venues are open 24 hours a day, while the Guardian has previously revealed that staff are paid bonuses linked to customers’ losses, undermining their incentive to intervene to prevent problem gambling.
Shops are increasingly offering a new breed of super slot machine, featuring a comfy armchair and a highly-immersive, 65-inch screen. Staff will offer drinks and snacks to keep punters playing, there are regular prize draws and “free spin” offers, and you can make cash withdrawals from your bank without leaving the shop.
Punters will sometimes play more than one machine simultaneously. Admiral has introduced a two-machine limit, which it says is designed to reduce harmful gambling.
Many are open under bingo licences, which may sound more benign to local authority planning committees. In practice, most have one bingo machine that is rarely used, if ever.
Can you win?
On a one-off basis, it’s possible to win up to £500. In tests across several AGC venues, the Guardian occasionally won some money, which will be donated to charity. But the machines have a fixed “return to player”, meaning that regular slot machine players will always lose. That’s why slots are a good target for a tax raid, and a valuable cash cow for companies, which like predictable sources of income. It’s also why gambling harm experts think they’re dangerous.
Will the budget tax raid change things?
Bookmakers say it will cost them money, leading to shop closures. Entain, which owns Ladbrokes, expects a £25m hit. But shares in the three listed slot machine operators – Entain, the William Hill owner Evoke and the Grosvenor Casinos owner Rank Group – rose sharply after the budget. Relieved investors had feared Healey would opt for a 40% rate.
AGCs were singled out by the chancellor, who said they and vape shops would be excluded from business rates relief, costing them a combined £10m. But AGCs appear well-placed to thrive anyway because of their low overheads and 24-hour opening. For the slot farms, it’s business as usual.
What do the slots companies 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”.
“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,” it said.
“Games in these venues are low-stake – costing as little as 10p a spin – and these businesses have been a longstanding part of the high street for decades, providing low-stake entertainment, local jobs and a boost to local economies. 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.
“Our members operate within one of the most tightly regulated licensing regimes in the world. Venues are regularly inspected, must comply with strict conditions, and can have licences refused or revoked where licensing objectives are at risk.”