Do You Need A License For An Arcade? Legal Requirements Explained

Thinking of filling a room with Arcade Machines and calling it your dream business? Hold up, yes, you do need a license for an arcade, though the type depends on your setup and where you’re based in the UK. Keep reading to find out which arcade license UK law applies, how to get it, and what rules you’ll need to follow before the fun begins.

Understanding the Key Legislation: The Gambling Act 2005

The foundation of every arcade license UK law is the Gambling Act 2005. This legislation decides whether your arcade counts as a gaming business, a family entertainment venue, or something that falls under gambling regulation.

The law draws a clear line between games of skill and games of chance. If your arcade features machines that rely on luck or offer prizes based on random outcomes, you’ll need a gaming machine licence UK. But if your setup focuses purely on skill-based games like racing, shooting, or rhythm challenges, you might be in the clear.

The Crucial Distinction the Law Makes Between Games of Skill and Games of Chance

Here’s the big difference, games of skill test ability, games of chance rely on luck. A driving simulator or dance game depends on how good the player is, not random results. But a slot machine or coin pusher? That’s luck, and the law calls that gambling.

Getting this distinction right is crucial. It determines whether you’re running a fun centre or a regulated gaming venue.

For Pure Video Game Arcades (Considered Games of Skill)

If No Prize is Awarded (or the prize is not dependent on score), No Gambling License is Needed

If your arcade is filled with video games, you’re in luck, no gambling license is needed. These machines are classed as games of skill, so long as players aren’t betting or receiving prizes based on chance.

For example, a café with a free-to-play Street Fighter cabinet doesn’t need a licence. But once you start handing out prizes or running competitions for cash, that’s when the rules tighten.

So, if you’re wondering do you need a license for an arcade in England for just video games, the answer is no, unless you introduce gambling elements.

Why You Still Need to Comply with Standard Business Regulations Like Health & Safety

Even if you dodge gambling laws, you’re still running a business. You’ll need to meet Health & Safety standards, get insurance, and make sure your space passes fire and accessibility checks.

If you’re figuring out how to open an arcade UK, this is where most new owners trip up. Councils care just as much about player safety as they do about prize regulations, especially if children are involved.

When a Gaming Permit or License Is Required

For Machines That Award Cash Prizes (e.g., Fruit Machines / Slot Machines)

Once you introduce cash prizes, you enter regulated territory. Machines that pay out money, like fruit machines or slot machines, are legally classified as gambling devices.

To operate them, you’ll need a gaming machine licence UK and approval from your local council or the Gambling Commission. Running one without permission can lead to heavy fines or even the loss of your business license.

For Machines That Award Physical Prizes (e.g., Crane Grabbers)

Crane machines and toy grabbers are where things get interesting. They may look innocent, but because success often relies on chance, they fall under gambling law.

Most of these are low-stake, low-prize machines and are covered under a Family Entertainment Centre licence (FEC). That allows you to operate them legally, provided you stick to strict safety and age rules.

For Coin-Pusher Machines (often called 2p/10p pushers)

Ah, the seaside favourite, coin-pushers. They’re classed as Category D gaming machines, which means they’re low-stake, low-prize, but still regulated.

If you plan to operate several, especially in a family arcade, you’ll need the right FEC permit from your council. Without it, even those innocent 2p pushers could land you in legal trouble.

The Different Types of Permits Available from Your Local Council

The Family Entertainment Centre (FEC) Gaming Machine Permit for Low-Stake Prize Machines

If your business caters to families, an FEC gaming machine permit is your go-to. It allows you to host Category D machines, like coin-pushers, cranes, and other low-stake games.

Your local council will check that your venue is safe for children and properly supervised. Think bright lights, friendly vibes, and games anyone can enjoy without risk.

The Adult Gaming Centre (AGC) Operating Licence for Over-18 Venues

If your arcade is strictly for adults, you’ll need an Adult Gaming Centre (AGC) licence. This applies to venues with higher-stake games such as Category B and C machines.

You’ll have to prove your venue enforces age restrictions, maintains responsible gaming policies, and complies with Gambling Commission rules. Failing to follow the terms can result in fines or closure, so this isn’t one to skip.

Special Rules for Pubs, Bars, and Other Alcohol-Licensed Premises

Automatic Entitlement for a Small Number of Low-Stakes Machines

Running a pub or bar? You automatically get the right to host two low-stakes gaming machines (usually Category C or D). Just notify your local council and pay a small admin fee.

This is perfect for pub fruit machines or trivia games, no full arcade license UK needed for this small setup.

The Need to Apply for a Licensed Premises Gaming Machine Permit for More Machines

Want to install more than two machines? That’s where the Licensed Premises Gaming Machine Permit comes in.

You’ll need to submit an application with details of your layout, staff training, and safety measures. Skipping this step can jeopardise your alcohol licence, so it’s best to play by the rules.

The Golden Rule: Always Consult Your Local Council First

Why Your Local Authority is the Definitive Source for All Licensing Information

Every region has its quirks. Whether you’re asking do you need a license for an arcade in Scotland, England, or Wales, your local council is the only source of official guidance.

They’ll tell you which gaming machine licence UK applies, how to apply, and what to pay. It’s the fastest way to stay compliant and avoid nasty surprises later on.

FAQ: UK Arcade Licensing

Do I need a license for a single retro arcade machine set to free-play in my cafe?

No license needed. If your arcade machine doesn’t accept money and doesn’t offer prizes, it’s considered entertainment, not gambling. Plug it in, power it up, and you’re good to go.

What is a Category D gaming machine under UK law?

A Category D machine is a low-stake, low-prize game, like coin-pushers or cranes. They’re common in Family Entertainment Centres and small arcades. You’ll need a Family Entertainment Centre licence if you’re running them commercially.

Is a "prize-every-time" crane machine considered gambling?

Usually not. If every player wins something and the outcome doesn’t rely on luck, it’s typically exempt from gambling laws. But if prizes vary in value or depend on chance, your council might still classify it under the Gambling Act 2005.

In summary: Whether you’re dreaming of a neon-lit seaside arcade or adding a few Arcade Machines to your coffee shop, understanding UK arcade licensing laws is crucial. The Gambling Act 2005 is your guide, but your local council is your best ally. Check your permits, know your categories, and you’ll open your doors legally, with the power on and the fun rolling.