In response to last week's emergency UK budget, Ken Mullarkey, national sales executive for the IOA Group, has outlined the cost to the industry of the VAT change due to come into effect from January 2011.
"While we all accept that the massive public debt has to be tackled, the gaming industry is asked to take yet another hit." he said. "While other industries and retailers are able to pass on this increase to the end user, we are not. Price of play is fixed and so our customers will be asked to dip into their pockets yet again.
Managed customers will see a reduction of on average £5 per machine/week in their profits, nearly three per cent. This comes on top of the 3.6 per cent hit on Amusement Machine Licence Duty announced in the last budget, which will impact from September in most cases. Tenanted groups will typically see £3 per machine/week wiped off their share of income.
"The IOA Group is concerned that this erosion of income is creating an environment in which rentals are coming under pressure, at the very time when operators’ costs are rising steeply, particularly fuel prices. With the introduction of new technologies and pressure to introduce new income enhancing solutions such as note recyclers to our machines, recovering the cost of these will become that bit more difficult."
