Latest news with #AGCs
The Guardian
18-05-2025
- Business
- The Guardian
Slot machine firms target UK's poorest areas and channel funds to billionaires
Slot machine companies are targeting Britain's poorest neighbourhoods and channelling the proceeds to billionaire-owned overseas corporations and a Wall Street fund that uses an offshore lending structure, the Guardian can reveal. The number of slot machine shops has risen by 7% since 2022, as companies -friendly planning and licensing laws to flood Britain's high streets with new 'adult gaming centres' (AGCs), most of which are open 24 hours a day. Venues are disproportionately concentrated in Britain's most-deprived areas, according to analysis by the Guardian, prompting concern from a leading addiction expert and calls from politicians – including Andy Burnham, the mayor of Greater Manchester – for councils to be given powers to stop new sites opening. Of 1,452 AGCs analysed, a third were in the poorest 10% of British neighbourhoods, while more than half served customers in the most-deprived 20%. Figures show that the pattern of targeting the least well-off areas continued during a recent surge of new shop openings, as market leaders Admiral and Merkur expanded their high street footprint. Seaside towns, many of which are economically deprived and also known for their amusement arcades, feature heavily among the areas with the highest concentration of AGCs, topped by Great Yarmouth. But other coastal areas that do not feature resorts are also heavily represented. Between them, Middlesbrough and Hull – the fourth and fifth most-deprived local councils – had 28 AGCs, according to the analysis, serving 424,592 people. In contrast, 14 local authorities, in which 1.7 million people live, don't have a single AGC. All but one of them are in the top 50% wealthiest council areas and eight are in the top 20%. MPs and addiction experts raised concerns that the spread of shops offering 24-hour access to slot machines – consistently ranked among the most-addictive gambling products in health surveys – risked exploiting vulnerable people. Prof Henrietta Bowden-Jones, the national clinical adviser on gambling harms at NHS England, said: 'Slot machine venues, particularly those open 24/7, deploy addictive products to keep vulnerable people playing for hours on end, against their own interests. 'The Guardian's findings indicate that the result of this is simply to channel funds from the pockets of the poorest into the pockets of the richest. This comes as the NHS is supporting record numbers who have had their lives destroyed by gambling, with 15 clinics now up and running across England.' AGCs, which feature machines offering spins of up to £2 and jackpots of up to £500, took more than £530m from gamblers in the last year for which figures are available. Burnham said: 'It's time we were honest about what [AGCs] really are,.' He warned that AGCs were 'targeting some of the most vulnerable in our communities'. 'It's unacceptable that councils have so little power to regulate them despite repeated concerns from charities and local residents. 'We must reclassify these venues in law, give local authorities stronger licensing powers, and hold operators accountable.' The Labour MP Beccy Cooper backed calls from Burnham and a group of more than 30 councils – led by Brent in north-west London – for councils to be given more powers to prevent new AGCs opening. Cooper said she was concerned that AGCs 'seem to be clustered in areas of higher deprivation lining the pockets of gambling companies at the expense of some of our poorest communities'. The UK's largest AGC operator, Admiral Slots, is a UK division of Novomatic, a global gaming corporation owned by the Austrian billionaire Johann Graf, who is worth $10.2bn (£7.7bn), according to Forbes. It has 346 venues in the UK, including bingo halls that also offer slot machines. Its UK holding company, Novomatic UK, has awarded its highest-paid director more than £4m in salary and bonuses over the past two years for which accounts are available and paid its Austrian parent company £82m in dividends. Germany's Gauselmann family, whose patriarch Paul Gauselmann is worth $2.6bn, according to Forbes, owns Admiral's biggest rival, Merkur, which has 262 shops. Merkur was fined almost £100,000 by the gambling regulator earlier this year, after the Guardian revealed how staff allegedly exploited a vulnerable cancer patient. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Burnham said he had been 'shocked' by the case. 'I've written to ministers to raise her case and lobby for basic changes that could make a huge difference in protecting everyone from the dangers of these places,' he added. The parent company of Merkur's UK operation reported a loss of £2m on revenues of £200m last year, as it spent money on an expansion plan that has brought more than 100 new shops to the high street since 2020. Private equity companies also rank among the largest slot machine owners. Investors in a 'tactical value' fund, run by the Wall Street bank Morgan Stanley, own the 39-strong Game Nation chain of slot machine shops. City Gaming, the UK business that houses Game Nation, is funded by a £118m loan from NHTV Cherry Holding LLC, managed by a Morgan Stanley fund, Companies House filings show. City Gaming paid £12.6m in interest on the loan to NHTV, which is based in the Cayman Islands, which does not charge corporation tax. Britain's largest motorway service station company, Moto Hospitality, also has 74 AGC licences. It is owned by a giant £86bn pension scheme, the Universities Superannuation Scheme (USS), in partnership with the private equity group CVC Capital Partners. Motorway service station slot venues were not included in the Guardian's analysis of where AGCs are located. A spokesperson for the arcades trade body, Bacta, said its members employed 9,000 people in the UK and paid £200m a year in tax. 'Social responsibility remains a cornerstone of Bacta members' approach to their operations and businesses,' they added. 'Their priority is to offer safe, enjoyable fun to the many different walks of life that enjoy playing slots in a safe and responsible way.' Merkur and Admiral did not return a request for comment. USS, CVC and Morgan Stanley declined to comment. The Guardian approached Game Nation for comment via Morgan Stanley.
The Guardian
23-04-2025
- Business
- The Guardian
Government pauses plans to ease slot machine rules across Great Britain
Plans to liberalise rules governing high street slot machine shops have been shelved, amid concern about the sector's treatment of vulnerable customers. Ministers were widely expected to allow adult gaming centres (AGCs), many of which allow customers to play slots 24 hours a day, to install more higher-stakes machines. But, in a rare setback for the fast-growing AGC sector, which declared itself 'frustrated' by the decision, relaxation of the rules will not go ahead this year and could be dropped altogether. Under a regulation known as the '80/20 rule', no more than 20% of the terminals in arcades and bingo premises can be category B3, a class of slot machine that allows stakes of up to £2, promising prizes of up to £500. The remaining 80% must be category C or D, where maximum stakes are £1 and the highest jackpot is £100. The land-based gaming sector has complained that this stifles growth because most customers don't play the lower-stakes machines, meaning shops are wasting floorspace and electricity costs. The previous Conservative government was preparing to ease the rule as part of a wider series of regulatory changes, published in a gambling white paper in 2023, that cracked down on online operators but were generally kinder to high street venues. In May last year, the Department for Culture, Media and Sport said it was considering either a new 50/50 ratio or abandoning the 80/20 rule altogether. But in a letter seen by the Guardian, DCMS officials said the government would 'not be introducing changes to the 80/20 rule this year'. They did not rule out reviving the plan but said the department recognised 'concerns about the strength of protections for vulnerable people in the adult gaming centre sector'. This year, the slot machine firm Merkur was fined almost £100,000 by the gambling regulator after the Guardian revealed how staff allegedly exploited a vulnerable cancer patient. Iain Duncan Smith, the former Conservative party leader who chairs a parliamentary group examining gambling harm, said: 'Given the insufficient protections in place for people in these venues and the addictive nature of these machines, increasing their numbers should be ruled out entirely and the current widespread breaches of regulations by AGCs, which are now proliferating on our high streets, must be urgently looked into.' John Bollom, the president of the arcades trade body, Bacta, said: 'We are frustrated with the delay in resolving the 80/20 issue, which was a key modernising proposal in the gambling white paper, but we remain hopeful that we will see the same progress as other sectors; and that when the minister looks again she will see this reform for what it is – common sense, safe for players and good for our ailing high streets.' Bacta said its members adhered to the highest standards of player protection. Beccy Cooper, a Labour MP, welcomed the move and called for the government to go further to restrict AGCs. 'Local councils also need more powers to enable them to restrict the number of gambling outlets in local communities to prevent gambling harms,' she said. DCMS has been approached for comment.
The Guardian
13-02-2025
- Health
- The Guardian
UK slot machine operator fined over cancer patient's activity
A high street slot machine operator has been fined almost £100,000 by the gambling regulator after the Guardian revealed how staff allegedly exploited a vulnerable cancer patient. Wendy Hughes, then 64, lost nearly £2,000 in the Stockport branch of Merkur Slots UK, over the course of two spells lasting 16 hours in November 2023, months after she was diagnosed with lung cancer. Staff at the branch, which has a 24-hour licence, knew she was going out to fetch more money from the cash machine as her losses piled up. Hughes, who became addicted to betting while working in a bookmaker, died before the Gambling Commission issued its verdict, her daughter, Jackie Olden, said. Olden has since begun campaigning for tougher restrictions on 'adult gaming centres' (AGCs), high street shops that offer slot machines at up to £5 a spin. On Thursday, she said: 'I'm happy they investigated Merkur but after the devastation caused to our family, the size of this fine doesn't go far enough. This case emphasises the urgent need for an independent gambling ombudsman so that customers have access to recourse when things go wrong.' In a regulatory announcement, the Gambling Commission said it had fined Merkur, which is owned by a German parent company, £95,450 for social responsibility failings. Andrew Rhodes, the regulator's chief executive, said: 'This was a clearcut case of an operator failing to follow rules aimed at keeping consumers safe from harm. 'In recent years there have been a number of cases of online gambling businesses failing to meet their social responsibility obligations – but this investigation shows that land-based operators also need to make sure they are minimising the risk to customers experiencing harms associated with gambling. 'All operators should make sure that not only do they have policies and procedures aimed at preventing harm in place, but also that staff are effectively trained to follow and implement them.' Internal records show that staff knew Hughes was going out to the cash machine to get more money to feed into the shop's machines. They even reserved her favourite machine with a 'hold card', a practice that exploits customers' irrational belief that a long losing streak on one terminal must surely end in a jackpot soon. Despite the warning signs, staff did not, at any point, check that Hughes was in control of her gambling. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The Gambling Commission said Merkur had social responsibility measures in place but that staff had failed to follow them. The regulator said Merkur has cooperated with its investigation and had taken remedial action to improve its customer safety procedures. Merkur has more than 230 AGCs in the UK, making it one of the largest players in a sector that is among the fastest-growing in the £11bn-a-year gambling industry. The Guardian has approached Merkur for comment. In the UK, support for problem gambling can be found via the NHS National Problem Gambling Clinic on 020 7381 7722, or GamCare on 0808 8020 133. In the US, call the National Council on Problem Gambling at 800-GAMBLER or text 800GAM. In Australia, Gambling Help Online is available on 1800 858 858 and the National Debt Helpline is at 1800 007 007
