Today in the UK, under the 2003 Licensing Act, lap-dancing clubs must simply hold a premises licence. This licence is required for any establishment – be it a pub, nightclub, coffee shop and so on, that wish to carry out "licensable activities". These include:

a) The sale or supply of alcohol

b) Provision of late night entertainment
 
The application for a premises licence under the Act is made to Licensing Board of the local authority for the district in which the establishment is to be set up, must detail which activities will be taking place, what security measures will be taken, what crowd capacity it will hold, and so on, and once a premises licence is granted, it remains in effect until the licence is revoked, suspended or surrendered. This means it is not time limited.

However, a separate licence is required, under the 1982 Local Government (Miscellaneous Provisions) Act, for establishments wishing to offer  “performances which are not unlawful [that] are given by one or more persons present and performing, which wholly or mainly comprise the sexual stimulation of persons admitted to the premises (whether by verbal or any other means)”.

Essentially, the law states that watching a lap-dance is not a sexually stimulating activity, no more arousing than drinking a cup of coffee.  A licence for a “sexual encounter establishment” is much harder to attain – the establishment faces far greater scrutiny from the local authority in regards to the activities taking place within, applications can be blocked by the public much more easily, and you would be far less likely to see such places springing up on your local high street.  

 

Read the text of the 2003 Licensing Act here.