The coin-op business in Spain is suffering, but surviving. A few governmental tweaks would make a big difference, however

The economic situation in Spain, along with the rest of southern Europe, is extremely grim right now.

And yet despite this the coin-op industry there, while not exactly thriving, is at least managing to survive. AWP figures are down, but the bingo halls are doing OK thanks to innovative new electronic games.

The biggest problem that the arcade, bar and bingo hall businesses are facing is the ban on smoking. “Of all the things that could help the industry, relaxing the smoking ban is the number one,” Angel Gallego of Metronia Group told InterGame. “2012 will be even worse than 2011 unless this change is made quickly.”

Elections are coming up in Spain very soon and it is widely believed that there will be a new government and that this new government will want to make some popular moves, including some kind of relaxing of the smoking ban.

“The next government has said it will look at relaxing the smoking laws,” said Gallego. “This really needs to happen. The 12 to 15 per cent losses that the industry was suffering due to the recession were turned into 25 per cent losses by the ban. In some areas it is as high as 35 per cent. The industry needs a change.”

If that is the main problem for the operators, the biggest bugbear for the manufacturers continues to be the fact that the country's 17 regions all have different rules and regulations covering the gaming industry.

“It's like having 17 different countries,” said Rafael Soto, general manager of Ortiz Gaming. “Each region has its own set of rules and regulations and different standards to be met. This is difficult because you need more resources.

“And there is a time factor also. In Mexico we can sell a machine and it can go into a bingo hall the next day. In Spain this process can take eight months because of the complicated homologation. You need to know the market very well. Because there is a lot of regulation, to do well a company has to have the passion to develop the market over the long term. In Mexico, it is more of a short-term market.”

Maria Jose Gallardo, director of research and development at R Franco, agreed that this was a big problem for manufacturers. “We have 17 different approval processes to go through for each new machine with no possibility of mutual recognition,” she told InterGame.

“We have a play price of €1 in one community, but 60 cents in another, even some at 40 cents, and we have jackpots of €500, €400 and even €240. The play cycle may be set at three seconds or even five seconds in some places. It all means that for each community we have to plan separately, to develop a game, certificate it, get it approved and monitor and maintain it.”

Another difficulty for the industry in Spain is the high level of taxation. “One of the main problems at the moment is that the taxes continue to be very high,” said Soto. “We need a review of taxation,” said Gallardo. The industry is lobbying the government in an attempt to attain reductions in tax.

The biggest downturn is in the revenue of AWPs sited in bars, the primary locations for such products. There has been a drop in average income of 37 per cent. The industry believes that the future of the AWP market Spain depends on certain changes being made.

“We must be allowed to have machines which are server-based, online, with one legislation which is open and flexible and with mutual recognition between the different communities,” said Gallardo. The industry also wants to be able to advertise and promote the games. Some operators have fallen by the wayside and the industry is keen to reverse that trend.

This market report can be read in full in our December 2011 issue of InterGame magazine.