The Turkish industry has vast room for improvement and those within it believe the country also has great potential as a manufacturing base for the rest of the continent...
Turkey can do for Europe what China is doing for the world. There is an air of frustration among Turks that the potential of their country is being neither appreciated nor harnessed. And microscopically, its coin machine industry is equally underperforming, through no fault if its own.
The overnight closure of its casinos 10 years ago and the subsequent witch hunt which saw the dismantling of its amusement industry, is indicative of a society which ‘threw the baby out with the bath water.’ Most of the blame for the subsequent suppression of the games and gaming industry must lie with its political leaders.
The business began in Turkey in the mid-1980s with games manufactured and actually developed by connecting the Atari 2600 or Commodore 64 home consoles to a television set and mounting them in a cabinet. The practice is a familiar one to anybody who has seen the games industry develop in the poorer countries of Asia or Africa.
In the case of Turkey, however, this entry to the business was quickly upgraded to mounting imported PCBs into the cabinets. These video games were inevitably counterfeit products, imported from Asia and installed into locally-built cabinets.
By the early 1990s, copy video games were firmly entrenched in the Turkish amusement industry. While no one would applaud the practice of copying games, it cannot be denied that they played a part in the development of the Turkish market, as they did in so many other parts of the world, enabling operators to get into the business economically.
An investment of US$500-600 could be recouped by an operator quickly - one to two months - and the better ones reinvested the income in original product, which inevitably performed better and earned better. In the face of the international policing activity, more secure technology and a swing towards dedicated games, the copy business died out. More sinisterly, easier access to games through the internet also had an effect.
It could be argued that the closure of the casinos and the closure of arcades were connected, for they happened at pretty much the same time, although most Turks would argue that the clientele at each was infinitely different (those under 18 not being allowed into casinos). Many in the industry are adamant that there was no connection and the timing was simply a coincidence.
Today, illegal gambling still exists in the country, mostly in Istanbul, and takes the form of ‘gambling parties’ in which a large house is rented by a gambler who invites his friends to play roulette and blackjack. More recent activities include bingo games held clandestinely in Ankara, abusing gaps in the Law of Associations which grew out of European law. Other illicit gambling is widespread in the Turkish cafés, with classic card games.
There is currently no action being taken against internet gambling, principally because the Turkish authorities, like those in most other countries, simply don’t know what to do about it. Internet gambling is freely available and the fact that Turks are targeted is obvious from the fact that foreign internet gambling sites frequently have Turkish language games available.
What the government can do, of course, is ban service suppliers from having a base in the country and this is vigorously enforced. Meanwhile, the Turkish Government is carrying out studies into methods by which it can stop or control internet gambling.
So, away from the negatives, what does Turkey allow these days? Talking with operator Hakan Arsan of Delta Eg Elk, it would appear that there is a business and that, although strictly regulated, it still has room to expand within those confines.
Arcades in the internationally familiar sense are very much down in numbers compared with the ‘old days’, probably not exceeding 300 in the entire country. But amusement games are played with great enthusiasm by Turks using PC game centres or internet cafés equipped with PlayStations which are hired out on a ‘play per hour’ basis. This type of location totals about 15,000 in Turkey.
On a positive note
And there are family entertainment centres that have gradually increased in number over the past 10 years to about 200 in shopping malls. On average, arcades contain about 30 or 40 games, compared with between 20 and 150 terminals in PC game centres and PlayStation sites. The arcades will contain classic video games using joysticks while in FECs the standard of equipment is generally higher, dedicated video games, air hockeys, redemption games, kiddie rides, some small park rides and softplay areas.
But there is also a considerable street market, which in Turkey takes the form of games operated in thousands of tourist hotels, motels and holiday camps and villages around the Aegean coast. Most of them have children’s play equipment as well as pool tables, PlayStations and video games, operated on a share basis between professional operators and the site owners.
In terms of a street location in bars, cafés and restaurants, only a few games are operated. Some bars will contain dart games, Photo Play machines are starting to enter the market in Ankara and there are estimated to be between 10,000 and 15,000 jukeboxes operating in the country.
Arsan’s own company began manufacturing jukeboxes in 1995 and today operates in virtually all sectors of the industry, with the import, distribution and operation of Photo Play games as one of its principal activities. The company has many ‘firsts’ to its name, all listed on its website, www.deltaeg.com.tr.
In all, Turkey has perhaps 50,000 games of all descriptions, far below the true potential for a country with a population exceeding 70 million. Where the growth in the industry exists, it is in FECs, for this is the most acceptable face of the games industry to the authorities who will happily grant a licence to operate within one of the many shopping malls dotted around Turkey’s major cities.
They take the traditional format of large amusement hall, with food and entertainment, often containing other anchor products such as bowling or skating. Differences with FECs in other countries are small, but generally it could be said that a children’s softplay area has greater acceptance in Turkey than elsewhere.
Redemption is legal, but there are some elements of it that are open to negotiation as the boundaries of prizes are often ‘stretched.’ Some contain ticket-only games and others direct vend of prizes.
The success of cranes in FECs has seen some degree of expansion of that type of game into street locations, usually in front of toy stores and newspaper kiosks, numbering perhaps 3,000 in total. However, the Ministry of Internal Affairs has stated that they are gambling machines and confiscations began last month.
There are Turkish games manufacturers, especially makers of larger parks equipment who, despite a largely neglected domestic market, continue to export. At the coin machine level, there are jukebox manufacturers, kiddie ride producers (mostly for the domestic market) and makers of crane machines. Their products can be found on their websites: www.starpark.com.tr; www.entagames.com; www.leventlunaparkrides.com/turk/rides.htm; www.samanyoluoyuncak.com.tr; www.zeklbilardo.com.tr; www.deltaeg.com.tr.
The operators remain comparatively small by international standards. Batuhan Yetisen, for example, from Antalya, operates about 1,500 games and is considered one of the larger players in the market, while Alfa Elektronic in Izmir is also substantial and Smartplay operates a string of FECs.
Turks enjoy playing games and would enjoy gambling if it was more freely available. For an amusement game, they would generally pay the equivalent of 55c to play in an FEC or 25c in street locations, up to €1.70 in tourist hotels.
Amusement games in Turkey are regulated by the individual municipalities. Generally, the rules are simple. For example, if someone has a licence to operate a bar, he does not need another licence to operate a game within it.
The laws governing the sector in Turkey are outmoded, having been framed in 1968. Within the Turkish Criminal Code, article 567 remains highly controversial within the industry, for it specifically bans ‘making available, importing or manufacturing, roulette, flippers and table soccers.’
The article also bans gaming. In 2004 an additional regulation was produced clarifying the situation on hotels and other accommodation sites, as well as places serving alcohol. It permitted electronic games with skill elements but without gambling and also made legal the use of games in internet cafes.
The Ministry of Internal Affairs in Turkey makes the rules, but the municipalities decide where the amusements will be permitted within their borders. For that they levy an amusement tax ranging from €2.7 to c54.7 per day, but it is generally charged at or near the lower end.
It may appear to be a well understood collection of regulations, if often ‘patchwork’ in its application with far too much ‘turning a blind eye’ by the police and authorities. This leaves the Turkish operators with a feeling of some insecurity and they would champion an updated regulation to cover the entire market, in order that investment could be encouraged.
Part of this process would also be some consideration given to the situation with Turkish customs. At present, amusement park machines, kiddie rides, redemption machines and game consoles (PlayStations) can be imported without restriction.
Games that are coin-operated and without a screen, such as cranes, can be imported but only after a request to do so is submitted to customs and a positive response gained. Equally, it might not be granted. Dedicated coin-operated video games, soccer tables and pinballs are not permitted into the country, which continues to be one of the great Turkish anomalies, especially as parts may be imported.
In February of last year, the customs authorities in Turkey issued a new circular which took some of the restraints off the industry. Used machines, for example, continued to be banned and a new tax burden was imported on machine import.
A game costing c10,000 coming from an EC country might have a freight charge of c1,000 and c330 in insurance, giving the operator a sub-total of c11,300, which would be higher if the game is imported from a country outside of the EC. A special consumption tax, which is applied to luxury items, of 20 per cent will take that imported machine up by another c2,266 and then VAT at 18 per cent is added to make the final cost c16,079.
In addition to that, brokerage commission and bonded warehouse charges are to be considered, which could drive up the final cost to the operator by 70 to 80 per cent above the initial price.
The effect of this, of course, is to depress the business in exporting machines to Turkey, just as it discourages the industry from buying games from abroad.
The anomalies in the Turkish regulations seem far from being addressed adequately. There is no Turkish trade association for the coin machine industry and the only hope appears to be the possibilities of the EC harmonisation laws, but that has only slight prospects. The entry of Turkey into the EC would help the industry; of that there is no question. What is happening in Greece to compel the authorities to conform with what is acceptable elsewhere in the EC is a satisfactory signal to what might happen in Turkey once inside the Community.
What is most frustrating to the Turkish operators is the pent-up ability of the Turks to contribute to European society in all sectors and, in the case of the coin machine industry, its ability to offer high levels of technical skills and workmanship.
As Hakan Arsan said: “Turkey could be a great market, but quite apart from the country as a destination for the industry, it would be a wonderful manufacturing base for the amusement sector. High quality workmanship comes at a much lower cost here and Turkey is much closer to Europe than China.”