The winning strategies of high street casinos

Casinos are "indelibly associated with glamour" in popular culture, conjuring images of James Bond "sipping a martini", surrounded by "black-tie wearing patrons", and with a roulette wheel in the background.

But the reality of 24-hour casinos operating in the UK is "worlds away from that image", said The New European. At "slot machine farms" on UK high streets, punters are "robotically feeding banknote after banknote into mesmerising terminals", said The Observer.

'High-octane gameplay'

The casino operators are "dab hands at bringing in customers and keeping them playing". They offer free tea, coffee and snacks, which is a "small expense given how quickly the outlay comes flooding back".

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The Observer told the story of one particular customer at a Stockport venue owned by German giant Merkur. The 64-year-old woman had worked at a bookmakers, where she had been "encouraged" to play digital roulette machines – known as fixed-odds betting terminals – on a free demonstration setting, to "stoke punters' curiosity and drum up more business".

But the "enthralling graphics" and "high-octane gameplay" set this member of staff on a path that led to a gambling addiction. She began to play with real money, even as she battled lung cancer. At Merkur's Stockport gaming venue, she once lost just under £2,000 over two days, including a session that lasted almost 12 hours.

Internal records seen by The Observer showed that staff were aware of what she was doing, and even reserved her favourite machine, to exploit her "irrational belief" that a long losing streak on one terminal would inevitably end in a jackpot soon.

Nationally, income from the £2-a-spin "B3" machines soared by 46% to reach a record £381 million in the year to the end of March 2023, according to the Gambling Commission. Between them, the two biggest players – Admiral, with 275 shops in the UK, and Merkur, with 230 – pulled in combined revenues of more than £420 million in the past 12 months.

In the face of Gambling Commission regulations, it appears that some firms may be "doing some gaming of their own", said The Observer. The number of £2 (category B) machines allowed in a gaming centre is limited to four times the number of their "lower-intensity £1-a-spin cousins" (category C). Bosses have found an "ingenious way around this", by stacking a rack of tablets, which technically count as machines, at the back of the shop, allowing them to "pack the rest of the floor with higher-stakes machines".

The government may loosen the rules, allowing a 50:50 ratio. The lower-stakes machines are less popular with customers, so a shift in the ratio could save the sector £20 million in energy costs alone, but the "effect on punters is much harder to predict".

'Pounds roll uphill'

Ironically, efforts to crack down on gambling marketing may be to the advantage of high street casinos. At the start of 2019, Italy banned almost all gambling marketing, but the industry said such a ban would be "ineffective" at addressing betting in settings such as shops or casinos, wrote Raffaello Rossi, a lecturer in marketing at Bristol University, and colleagues on The Conversation.

"Every pound that drops into the slot eventually rolls uphill, helping to enrich billionaire owners and fund political lobbying", said The Observer. With "millions at stake" it's "no wonder that operators are pouring some of the money they make from punters into political lobbying".

Last year, Merkur "boasted" of meeting its 65th MP, meaning it had "glad-handed" 10% of the House of Commons, including the gambling minister, Stuart Andrew.

The lobbying "now appears to be on the verge of bearing fruit", as regulations governing high street slot machines are expected to be loosened, even as ministers crack down on online gambling. The government is considering allowing gamblers to pay with contactless debit cards, making payment even easier. Now, with "one eye on a looser legal landscape", the sector's major players are "plotting aggressive expansion".

The two big players and their smaller rivals are submitting planning and licence applications across the country, often for 24-hour opening, by "pitting their vast resources against cash-strapped local authorities and the communities they serve".

Last year, more than 500 letters of objection "flooded in" against plans to turn the closed Barclays bank in Ashford, Surrey, into a "round-the-clock" gambling centre, open every day except Christmas, said Surrey Live. "Ashford is not a prosperous town and a gambling establishment will put it on a downward spiral," said one resident.

Despite objections from residents and the local MP, a north London council said it was "compelled by law" to approve an application from one of the smaller casino operators.

Merkur said the case of its Stockport customer highlighted by The Observer had been "fully investigated" and "extensive retraining [of its staff] has taken place".