OK, 1,000 Gauselmann video-based AWPs going into a UK market likely to take 12,000 machines in total in the next year isn’t actually 12 per cent. Some people noted that from one of my previous moans on the subject. Put it down to septuagenarian dyslexia [shouldn't that be 'dyscalculia'? - Ed].
But the point remains the same. It is a big chunk of a rapidly depleting market. And since that piece of sage-like rumination, the plot has thickened considerably.
Now we learn that the Gauselmann Group has taken 25 per cent of Sceptre Leisure and Sceptre, no doubt morally reinforced by the extra clout that comes from part ownership by powerful elements (the other is Playtech), has laid the law down in no uncertain terms themselves.
Hopefully it will be backed by Sceptre’s competition and the net result will be to bring retailers to the realisation that if they maintain the stranglehold on the industry’s financial throat, there simply won’t be an industry long term, or perhaps medium term.
So let’s put some markers down for a failure to redress some of the balances.
If nothing happens and the bid to raise rents fails, then next year the market will see new sales fall further to between 10,000 and 11,000.
There would be an accompanying increase in the numbers of lower cost Category D machines in arcades to take advantage of the 20 per cent ruling for Category B3 placement, which in turn will further reduce Category C numbers.
The contraction in the market will see more smaller OEMs making up their sales with content updates rather than machine production and more B3 slots will be sold direct by the OEMs rather than through distributors.
Rents, currently as low as £35 a week on a five-year contract, will be forced even lower. We can now see advertising of Cat C machines at rents of £4.29 or £5 per day.
The retailers will become more demanding on "extras" such as note recyclers, payout update kits and Olga data capture units, which effectively means that rents in real terms will go down by around £3 a week over the next three years.
Retailer intransigence over rents will force still more OEMs out of the market, more consolidation or even liquidation.
I could go on but maybe we shouldn’t go there and trust to common sense among the few remaining operators to dig their heels in on this one and at long last get rents up where they should be.
I also take some solace from the fact that large slices of the UK industry are now in the hands of our Austrian/German friends.
Yes, every Novomatic or Gauselmann slot imported into the UK is one fewer built here but, by the same token, Paul Gauselmann and Johann Graf are not the types to sit around and be bullied by site owners.
They will want a proper return for their investment, and collectively they have the clout to enforce it.
