Slot machines dont discriminate. However, the data suggests that some postcodes are playing a much heavier hand than others. Over the past few years, adult gaming centres (AGCs) have multiplied across the UKs most deprived towns and cities, creating a familiar scene: empty shops, boarded-up pubs and one garish, glowing venue promising jackpots seven days a week. While the reels spin, the profits soar. But they dont stay local.
revealed that a third of all AGCs in the UK are located in the lowest 10 percent of the countrys most deprived neighbourhoods. Over half are in the poorest 20 percent. In contrast, some of the wealthiest local authorities, home to 1.7 million people, dont have a single AGC. In Hull and Middlesbrough, deprivation has a postcode, and its lit up. Twenty-eight AGCs serve just under half a million people. The machines outlast the daylight. This is not random. Its a postcode pattern, and its being used to precision-target poverty.
Who profits from poverty?
At the heart of this expansion are two familiar names: Admiral, owned by Austrian billionaire Johann Grafs Novomatic, and Merkur, controlled by Germanys Gauselmann Group. These two slot machine powerhouses have expanded aggressively since 2022. Admiral alone runs 346 venues in the UK. Merkur holds 262.
Together, theyve helped fuel a 7 percent rise in slot machine shops in just three years. Their venues are open 24/7. Their machines promise jackpots of up to ?500 (580). And their profits are routed offshore through dividends, complex loan structures, and tax-optimised corporate arrangements. Novomatic didnt just win big. It cashed out. To the tune of ?82 million (95.1 million), wired out of Britain like a jackpot nobody local ever saw.
In one case, a Morgan Stanley fund backs a 39-shop chain called Game Nation via a Cayman Islands structure that earned ?12.6 million (14.6 million) in interest alone. The UK Gambling Commission fined Merkur almost ?100,000 (116,000) in March after a Guardian investigation found staff had allegedly exploited a vulnerable cancer patient. The company declined to comment.
As Prof Henrietta Bowden-Jones of NHS England put it,
Slot machine venues, particularly those open 24/7, deploy addictive products to keep vulnerable people playing for hours on end, against their own interests.
Councils frozen out
Despite mounting evidence that AGCs cluster in struggling areas, local councils remain powerless to stop them. Under the current Gambling Act, planning laws do not provide sufficient flexibility to reject new licence applications, even in over-saturated neighbourhoods.
Andy Burnham, Mayor of Greater Manchester, and over 30 councils, led by Brent, are now demanding change.
Its unacceptable that councils have so little power to regulate them despite repeated concerns from charities and local residents, said Burnham.
We must reclassify these venues in law, give local authorities stronger licensing powers, and hold operators accountable.
Labour MP Beccy Cooper echoed the concern, citing clusters of AGCs that appear to be targeting deprived communities to line the pockets of gambling companies at the expense of our poorest residents.
The cost to the high street
Slot machine venues dont just compete for attention. They compete for survival. In many towns, they are among the only businesses that can afford to keep the lights on. But this comes at a cost.
Studies show that high densities of gambling venues correlate with increased poverty, school dropouts, poor housing, and health issues. Small businesses struggle to compete with AGC incentives, such as late-night hours and free amenities. Disposable income is drained into machines, not markets. Investment avoids these areas, fearing the instability and reputational risk of so-called gambling strips.
The result? A substitution effect where the money that might have supported a local caf, shop, or butcher is instead fed into a machine owned by a foreign billionaire. The town looks alive from the outside. But its flickering, not thriving.
Economic strain and tax contradiction
Despite the challenges, the AGC sector contributes over ?200 million (232 million) in taxes annually while earning just ?100 million (116 million) in net profit. That means for every pound earned, two are paid in tax. On paper, that makes AGCs a tax-efficient sector. However, it also means that regulatory strains like machine upgrade mandates or profit-capping rules have outsized impacts.
Recent UK Gambling Commission proposals require all slot machines to include modern safety features, such as spin speed controls, net loss displays, and mandatory breaks. While positive for player protection, these upgrades cost upwards of ?10,000 (11,600) per machine. Many older units cant be retrofitted. The cost could spell closure for smaller arcades, especially those in seaside towns. Merkurs parent company posted a ?2 million (2.32 million) loss on ?200 million turnover. Not because it failed but because it spread. Expansion isnt always about profit. Sometimes, its about control.
Trade body Bacta warns of an existential threat to these venues. Vice President Joseph Cullis said,
The proposals could put some operators out of business. They are unfair to small firms and completely ignore the legacy of machines that have served our communities for decades.
Jobs, or just jackpots?
Its true that AGCs employ thousands and pay business rates. They offer security, hospitality, and management roles, often in areas with limited job opportunities. But critics argue that these jobs are precarious, low-wage, and usually part of a cycle that does little to build long-term economic resilience.
Research shows that gambling venues in deprived areas rarely drive new economic activity. Instead, they redirect existing local spending. As one study put it, AGCs dont bring new money into towns. They just recycle hardship.
Any benefit to infrastructure, such as new roads, lights, or utilities, is usually incidental. Its the price of access, not investment. And while industry groups argue that slot machines are just another form of entertainment, few would make that claim about an industry that earns more from Hull than from Hampstead.
While regulation snoozes, the slot machine never sleeps
The governments white paper on gambling reform included changes for online slot machines. But, progress has stalled for land-based venues. The 80/20 rule that caps the number of high-stakes B3 machines in an AGC at 20 percent remains in place for now, with consultations pushed to 2025.
In the meantime, AGCs continue to open. The reels keep spinning. And communities already facing economic hardship watch as wealth leaves their high streets, one tap at a time.
If the UK is serious about responsible gambling, it needs to stop pretending all postcodes are equal. Because in too many towns, slot machines dont just fill a shopfront they fill a gap that regulation left behind.
This isnt regeneration. Its extraction and a pipeline from the working-class wallet to a billionaires offshore fund. And weve normalised it. Legalised it. Built policy that rewards it. Councils cant stop it. Communities cant block it. And the government wont own it.
We talk about player protection. But what about place protection? Profit doesnt just override protection. It rewrites the rulebook.
