Although gambling is sometimes referred to as recession-proof, leisure machine operators still face the same challenges as other businesses at this time. Revenues generated from gaming machines in public houses can contribute upwards of 25 per cent of their net profit. When you are in the business of generating such a significant proportion of your customers’ profits, times of economic downturn prove the opportunity for strong operators to excel.

The Government’s triennial review of stakes and prizes gave a boost to fruit machine income aftr the increase in maximum jackpot to £70, which came into force this year. From a machine operators’ perspective, finding the capital required to update and replace machines to match demand has proved challenging, particularly for the larger companies who operate many thousands of machines in the UK. Customers were keen to see the new machines in their pubs as soon as possible, yet the investment required millions of pounds The biggest challenge presented by the introduction of £70 machines was obtaining asset finance at a time when there has been no liquidity in the markets. Those who have access to capital have seized the market opportunity and are producing very positive results for their customer partners, particularly the operators of managed pub estates.

The next challenge is one of education, in terms of ensuring that pub landlords are doing everything possible to maximise the return from the asset.

The importance of capitalising on the change cannot be underestimated. In fact, in the present climate, the incomes generated via fruit machines for some pubs is sometimes the deciding factor between survival and closure. The Publican, the trade publication, said recently that the AWP (fruit machine) could be the “most profitable few square feet in the pub”.

The challenge now for the licensed trade is to ensure that it derives maximum benefit from and capitalises fully on the change in regulations. Machines that pay out the new jackpot require a higher monetary float to ensure that they are not starved of pound coins. Landlords are encouraged to refill the supply of pound coins, which ensures that the note acceptor devices do not shut down. Estates where this proceedure is followed correctly can record an rise in machine takings of up to 20 per cent.

The introduction of new products, such as Pull-Tab-Lotto, provides an additional revenue stream for pub operators. The lotteries not only provide increasing revenues for the pub but also raise tens of thousands of pounds for charities.

Gaming machine income is criticial, therefore, critical to the continued health of many pubs. Any steps taken by legislators or by pub companies need to take into account the relevance and importance of this area in these troubled times.

Ken Turner is chief executive of Sceptre Leisure, the leisure and gaming machine supplier

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