A GC sector's dismay over government's rule change halt
UK Abandoning Plans to Loosen Regulations on Retail Gaming Machines, Leaving Operators Discontented
Operators running adult gaming centers (AGCs) in Great Britain have vented their frustration over the UK government's decision to temporarily halt plans to ease regulations on high-street slot machine arcades.
Putting the brakes on loosening in 2025
The move to put off loosening the rules means that the relaxation of the "80/20 rule" won't happen in 2025, and according to the Guardian, "it may be scrapped altogether."
Current regulations limit the number of category B3 slot machines, those that allow stakes of up to £2 ($2.66) with winnings of up to £500 ($665), in AGCs to a mere 20%. The remaining 80% of the machines must be categorized as C or D, which limit stakes and jackpots to £1 ($1.33) and £100 ($133) respectively.
The UK Department for Culture, Media and Sport (DCMS) cited worries about AGCs' treatment of vulnerable players as the reason for their move.
Going against the consensus
As per reports, the Starmer administration was "generally expected" to permit the flourishing AGC industry to install more slots with higher payouts.
A major gripe among AGCs was that the 80/20 rule hindered growth as most gamblers opt for high-paying slots, leaving lower-stakes slots as wasted floor space and unnecessary power bills.
Last May, the DCMS indicated it was contemplating either a new 50/50 rule or scrapping the 80/20 regulations entirely.
However, on Wednesday, The Guardian reported that the DCMS had decided to hit the pause button on 2025 changes, citing concerns about the effectiveness of safeguards for vulnerable individuals within the AGC industry.
A case in time arose in February when UK Gambling Commission fined Merkur Group UK £95,450 ($126,983) for failing to meet social responsibility standards at one of its AGCs in Stockport, which was owned by the German gambling giant Gauselmann Group's UK subsidiaries[3]. It was alleged that the staff at the Merkur AGC had targeted a vulnerable cancer patient[5].
Keeping the faith
John Bollom, Bacta President, voiced the disappointment of the members he represents from the amusements and low-stakes gambling arcade sector, but added that Bacta remained hopeful that the DCMS would revisit their plan.
"When the minister looks again, she'll see this reform for what it truly is - a common sense move, safe for players and beneficial for our struggling high streets," Bollom stated[1].
In contrast, Labour MP Beccy Cooper welcomed the pause and called for even stricter restrictions on AGCs, "Such as giving more powers to local councils so they can limit the number of gambling outlets in local communities."
Why was the plan halted?
The UK government's decision to pause the proposed changes stems from growing concerns over gambling-related harm, particularly in protecting vulnerable players[3][5]. This is a shift in focus that follows recent incidents, like fines imposed on operators for exploiting vulnerable customers[3][5].
Potential repercussions for AGC industry
- Regulatory unpredictability: The halt in regulatory changes creates uncertainty for the AGC industry, which had anticipated a more favorable direction. This doubt can discourage investment and growth in the sector[3][5].
- Economic impact: Maintaining the existing "80/20 rule" means 80% of machines in AGCs stay as low-stakes. This can limit revenue potential and heighten operational costs for operators, possibly leading to closures or reduced profitability[3][5].
- Stricter regulations: Some quarters, including Labour MP Beccy Cooper, advocate for even harsher restrictions on AGCs, such as increased powers for local councils[1].
- Industry response: The decision has provoked dissatisfaction from the industry, but there's still optimism that future assessments could still foster positive changes for the sector[1][3].
Public opinion impact
The halt indicates a more cautious approach by the government towards gambling regulations, which may influence public perception of the industry's practices. This could lead to increased scrutiny of all forms of gambling, beyond just AGCs, affecting the entire gambling landscape[3][5].
The UK government's decision to delay the relaxation of regulations on adult gaming centers (AGCs) in 2025 may lead to regulatory unpredictability within the AGC industry. This could discourage investment and growth, as operators were anticipating a more favorable direction.
The delay in loosening the "80/20 rule" means that AGCs might face economic impact, as 80% of machines in these centers will continue to be low-stakes, limiting revenue potential and potentially leading to closures or reduced profitability.
Some quarters, such as Labour MP Beccy Cooper, are calling for stricter regulations on AGCs, including giving more powers to local councils to limit the number of gambling outlets in local communities. This could lead to increased scrutiny of all forms of gambling, affecting the entire gambling landscape.
