Trade body BACTA estimates there are about 2200 machines in motorway services, or about one percent of the UK’s total installed base. The exact number of venues is oddly difficult to determine, in part because the sector is sometimes defined as comprising only the strictly-regulated services on actual motorways, and at other times as including those on other main roads. There are also differences in counting methods: when an operator has two adjacent sites on opposite sides of a motorway, as many do, should they count as one or two?

In any case, the official Highways Agency figure of 71 effectively underestimates the prevalence of this type of business, as the big three players alone operate more than a hundred: Moto has 58, Welcome Break 26, and Roadchef 19. Other operators such as Westmorland and Extra MSA generally have much smaller estates (and often concentrate on non-motorway sites). So, depending on definitions – when does a fuel station with a food-service counter in its shop become a service area? – the total number of locations is probably between 150 and 200.

The amusements opportunities they provide can include Category B and C machines in a mini-adult gaming centre. Welcome Break, for example, runs these as a sub-brand – Welcome Break Gaming – while Roadchef offers more than 200 B3 and C machines across its estate, on a revenue-share basis with Inspired Gaming Group. And they can also, of course, operate as unlicensed family entertainment centres offering Category D games.

Why gaming matters

Gaming revenue is important to the operators of service areas for a number of reasons. First, they are suffering from a declining market, not only as a result of the economic downturn but also because of their poor consumer appeal. Researcher Mintel says “the roadside catering market as a whole remains dogged by consumers’ preconceived ideas of the high prices, poor quality and overall poor value for money available, the latter being particularly significant during a period of economic instability”, and predicts that the market will decline, in today’s prices, from £594m five years ago to £479m a year by 2015.

Second, they have unusually high costs. Not only does the bill for a new-build service area come to around £30m, but those on motorways are obliged to offer a range of services – including basic catering – 24 hours a day, 365 days a year. Adding insult to injury, a large proportion of their customers use only those facilities which the operators are required to provide for free, such as toilets and parking.

For many, the solution has been to do deals with well-known retail and catering brands – for example, Welcome Break with Starbucks, Burger King, KFC, WHSmith, and Waitrose, or Moto with M&S, Costa Coffee, Krispy Kreme and Upper Crust. Not only is this intended to reassure customers of product and service quality, and help justify the premium prices which the services operators’ overheads demand. It also enables the operators, which are not allowed to advertise themselves on the motorway, to partially circumvent this limitation by attracting drivers with branded signage.

The development of their gaming offer, then, is likely to reflect this progress in retail and catering. It’s likely that over the next few years we’ll see service areas introduce more smartly-presented gaming zones, perhaps operated and branded by well-known names from the gaming or betting industries. Motorway services have come a long way since the first opened in Watford Gap in 1959, but as a sector they still face severe challenges – and even if amusement is not normally the experience associated with a visit to a Moto, Welcome Break or Roadchef, it could be an increasingly important part of their future.

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