Industry sector: Leisure

Amusement arcade: Licences

What action do I need to take?

If you're building a new arcade or changing the use of existing premises, it's likely that you'll need to obtain planning permission from your local authority.

Permission to operate an arcade

Current gambling laws require that anyone who wants to set up an arcade in Great Britain must observe the following:

  • to operate an adult gaming centre or a licensed family entertainment centre you need an operating licence and possibly one or more personal licences from the Gambling Commission. A criminal record check is likely to be required as part of the Gambling Commission licensing process. You will also need a premises licence from your local authority. Operating licence holders are required to follow a Code of Practice and to submit annual regulatory returns
  • to operate an unlicensed family entertainment centre you will only need a gaming machine permit from your local authority

You can find out more about the permits and licences you will need on the Gambling Commission website. Your local authority will be able to give you more information about gambling premises licences and gaming machine permits.

To operate an amusement arcade in Northern Ireland you will need an amusement permit from your local authority. You can download more information about amusement permits in Northern Ireland from the Department for Communities website.

Registering for Machine Games Duty

Machine Games Duty (MGD) is the main taxation system for gaming machines. Briefly, the key details of MGD are:

  • MGD is payable on machine games where players hope to win a cash prize that is more than the cost to play the game
  • there are two rates of MGD; the lower rate of 5% for machines where the maximum stake is 20 pence and the maximum cash prize is £10 and the standard rate is 20%, which applies to all machines not covered by the lower rate
  • you are required to register with HMRC at least 14 days before machines are available to play

(The higher rate of MGD in force from March 2015 only applies to Category B2 machines that arcades aren't allowed to offer.)

Full details of MGD are available from the HMRC section of the website

Other licences

You're also quite likely to need a Music Licence from PPL PRS Ltd. There is an annual fee for this which you can pay online on the PPL PRS website.