Based on the Blackpool experience I think you'll find this covers sex shops, strip clubs, pole-dancing venues and the like. NOT massage parlours. Maybe swingers clubs.
In Blackpool they gave the existing locations grandfather rights, then set the maximum number of allowed licences to match the existing number of premises in each category (i.e. two sex shop, three strip clubs). They then said that no new licences would be awarded, and none would be allowed to be transferred. Effectively means that as businesses owners retire, or locations change hands the licences will extinguish with no replacements, so eradicating them.
Massage parlours don't come into this because if they're acting legally they're not providing sexual services. If they are providing sexual services then they're acting illegally as brothels - and so can't be licenced