2008 saw the sharp departure of Inspired Gaming Group from the UK pubs sector and it is no secret that many were shocked by the news. Here, Helen Fletcher takes a look at how this decision has affected the group and what it means for its future

Inspired Gaming Group now has four key trading divisions covering the UK licensed betting office sector, the UK gaming sector, the UK leisure sector and the international market.

It has become one of the world’s leading players in open server-based gaming and is also one of the leading providers of analogue and open SBG machines in the UK for the leisure and gaming markets.

The sale of its pubs division to Danoptra Holdings in the summer of last year has, according to Adam Hodges, managing director of the UK leisure sector, "allowed the company to restructure and focus its efforts and invest in the areas that are currently performing well."

Inspired’s strong focus on SBG has also modernised how the group operates and what it can offer clients. It is now one of the global leaders in SBG technology with over 25,000 networked terminals in operation.

In addition to a deep SBG operational expertise Inspired has a 24/7 global support facility in Bangor, Wales, that allows the majority of faults to be fixed remotely before they are even detected by the operator.

Operating throughout UK casinos, bingo clubs and other associated venues, Inspired has an approximate 37 per cent share of the bingo market and a 20 per cent share of the casino slots and e-table markets.

The group services and operates over 11,500 SBG terminals for gaming clients as well as a range of traditional analogue machines. Key UK gaming clients include Gala Bingo, Gala Casinos and Stanley Casinos.

Although SBG is one of the group’s main focuses it also has interests in the licensed betting offices sector and the leisure sector as both continue to prosper.

Inspired currently provides 41 per cent of the UK LBO market with gaming content and has long-term contracts with leading gaming companies such as William Hill, Ladbrokes, Betfred and Paddy Power, providing SBG technology, leading edge terminals and a wide range of UK Category B2/B3 games.

The group is also one of the market leaders in the UK consumer leisure machines market, providing a comprehensive range of gaming and entertainment equipment and managed services to a host of venues.

The leisure team provides tailor made solutions, advice on potential development opportunities and a total management package to both inland and seaside amusement arcades.

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With 12,162 machines sited in over 104 locations around the UK, this equates, on average, to over 80 million customers passing through the group’s leisure operations annually. Key leisure customers include: BAA Heathrow, Manchester and Stansted airports, Bourne Leisure, Butlins and Haven holiday centres.

For Hodges, like other sectors of the gaming and amusement industry in the UK, the leisure sector has definitely seen business slow down. But, he feels it has less to do with the smoking ban and more to do with the general economic climate.

"The smoking ban doesn’t really have as large an effect on sites such as holiday parks, motorway services and bowling alleys as customers have never been allowed to get into the habit of smoking while they play in these types of environments."

There are businesses within the leisure industry such as bowling alleys and airports that have found amusement income difficult, but again not necessarily directly in relation to the smoking ban, but more to do with a drop in footfall.

"People are definitely feeling the pressure and leisure spend is getting less of a priority and is being cut right down," continued Hodges. "In bowling, the arcade machines are seen as a secondary spend. Airports have also really felt the pressure of a drop in passengers walking through and have had a tough few months recently."

In the international market, Inspired is currently experiencing high growth as a supplier of its Open SBG platform to leading gaming and casino companies.

Currently operating in over 10 countries across Europe, the US, Macau, south east Asia and South America, Inspired offers the same range of products available in the UK, such as Multi-Win Roulette and Virtual Sports. Key international clients include Codere, Caliente and Tabcorp.

Looking back over the events that have taken place and allowed the group to get to such a stage - Inspired Gaming Group, formerly Leisure Link Group, was given life in 2006 through the completion of an Initial Public Offering and listing on the UK’s Alternative Investment Market.

It allowed the new management team to integrate the traditional operating business with the SBG technology business creating a fully integrated SBG-focused gaming machine operator.

Inspired also acquired Red Vision, a developer of virtual sports content and a computer generated visual effects production company at this time.

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Since then, the group has been through even more changes. In 2008 the group sold the TV business of Red Vision but retained the lucrative Virtual Sports business. In July, following a strategic review of the pubs sector, Inspired sold its pubs operating division to Danoptra, which brings us to today’s situation.

Commenting on the changes in the gaming industry, which led to the sale of this division, co-chief executives Luke Alvarez and Norman Crowley, told InterGame: "Firstly the period up to the enablement of the new Gambling Act on September 1, 2007, was unsettling with clearly defined legislation not forthcoming until late in the day.

"This resulted in little time for planning so many manufacturers and content providers were unable to plan ahead, meaning as a result they were ill prepared.

"The impact of the new legislation on certain machine categories such as Section 16 and 21 has been much commented on and while their demise was known it has not stopped the reduced revenue impact it has had on some sector incomes such as bingo and adult gaming centres.

"Secondly the smoking ban hit harder in England than had been the prior experience in Scotland," they continued. "Sectors hit hard from this were the pubs where the impact has been as much as double that felt in Scotland and bingo where interval play on machines and prize bingo has been hit hard by interval smoking breaks.

"However, because we are always at the forefront of technology and due to our Open SBG platform it is easier for us to adapt to changes in legislation than more traditional companies.

"The introduction of server-based gaming products not only revitalises the player experience, and therefore increases the revenues from gaming machines, but it also enables the introduction of a lower cost structure associated with the networking of a terminal.

"Fewer physical machine changes, remote diagnostics resulting in less site visits by engineers and changes to cash collection procedures are all less costly than maintaining traditional analogue machines.

"Innovation and technology are what Inspired is built on and these two core elements have certainly helped us to benefit from changes to the sector."

Commenting on trends at an international level, Alvarez and Crowley said: "Asia has been particularly receptive to product development. Regulation slows things down in other territories, for example, the current legislation in the US stops the number of times machines can be modified, which inhibits SBG technology.

"At Inspired we have a wide portfolio of products including wide area gaming, VLTs, slots, linked casino table games, bingo, virtual sports and B2/B3 for the UK market. It allows us to meet the requirements of different clients in different countries and we are very aware of player trends."