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Great Britain Market Report
Published:  14 January, 2011

What do Britons play?

BACTA, the trade body which describes itself as “representing the British pay-to-play leisure machines industry”, says the most common type of machine in terms of installed base across the country is trivial AWPs, at 55,500 units.

They are followed by pool at 49,700 units; jukeboxes at 29,100; club/jackpot machines at 28,300 units; video at 27,500; novelties at 26,600; kiddie rides at 23,500; SWPs at 14,100; pushers at 4900; and pinball at 2000.

The most popular locations for pay-to-play leisure machines are pubs, representing 165,100 machines, according to BACTA. Also notable are seaside amusement centres with 105,200, clubs and casinos with 38,800, and licensed gaming centres with 29,800. Less significant types of venue include licensed betting offices with 14,500 machines and motorway services with 2200.

However, nearly a further 45,000 machines are in locations falling into none of these categories, an indicator of their prevalence throughout daily life in Britain.

There are of course significant variances in the categories of machines found at different types of location. Most importantly, gambling machines are not generally located in rooms to which under-18s have access.

Gambling in Britain

The last major survey on the gaming industry in Britain was conducted by the Gambling Commission in 2006-07. It found that in that year turnover was more than £84bn with gross yield (i.e. bets placed minus winnings paid out) of £9.9bn, although a quarter of that was attributable to the National Lottery. (Its figures naturally did not include the many machines in BACTA’s categories that do not involve gambling, such as rides and jukeboxes.

A survey of consumers showed that 68 percent of the population, or about 32m adults, had gambled in the last year. However, a substantial proportion of that number was again attributable to the National Lottery. Still, 48 percent of the population or about 23m adults had participated in non-Lottery gambling.

Twenty percent of the individuals surveyed had bought scratch-cards, 17 percent had bet on horse races, and 14 percent had played slots. Internet gambling was significantly less common at six percent (split more or less evenly between online gaming and online sports betting), although it is almost certain that the next major survey – more of which below – will show that figure rising significantly.

The amusement arcades sector

The Gambling Commission defines three distinct kinds of amusement arcade: adult gaming centres (AGCs), licensed family entertainment centres (FECs), and unlicensed family entertainment centres. Each category requires different permits and can offer different kinds of machine. AGCs are restricted to adults, and licensed FECs can also have adults-only zones.

There were 632 AGCs and 319 FECs at March 2009; the former figure was up slightly on the previous year, and the latter down slightly.

Not only is the number of AGC venues around twice that of the FECs, each AGC venue generates considerably more gross profit from gaming machines. For the 632 AGCs, gross profit of £397.4m breaks down to about £630,000 per site. For the 319 FECs, gross profit of £92.1m is just £290,000 per site. (For comparison, gross profit from gaming machines in the UK’s 143 casinos was £120.5m, or around £840,000 per site.)

This profit comes from machines in the B and C categories described below.

AGCs employed the equivalent of around 10,000 full-time staff, and FECs around 5000. However, AGCs were much more likely to employ part-timers: that figure of 10,000 full-time equivalencies represents nearly 20,000 individuals. By contrast, just 5700-odd individuals make up the FECs’ full-time equivalency of 5000.

In other words the “average” AGC worker is employed roughly half-time and the “average” FEC worker nearly full-time, although those averages doubtless hide great variance in working hours within each sector as well as between the two.

Each sector also employed casual workers on a seasonal basis reflecting visitor patterns to the seaside towns where many of these businesses are located. In both cases, the minimum number of casual workers employed at any one time was around 1000 and the maximum around 3000.

Regulation of gaming machines

Under British rules, gaming machines fall into a number of categories.

Category A can have unlimited stakes and prizes, and are found in casinos, which can have up to 1250 such machines apiece.

Category B have stakes limited to £2 and maximum payouts of £4000, and can be found in casinos and licensed betting offices. Category B2 machines have maximum stakes of £100 and payouts of £500, and again are located in casinos and licensed betting offices, the latter being limited to four machines per site.

A wider range of locations, however, applies to category B3, which are found in casinos, licensed betting offices, bingo premises and AGCs. These have maximum stakes of £1 and prizes of up to £500. Bingo and AGC locations are limited to four such machines each. (These rules are shortly to change.)

A minor variant, category B3A, has the same limits and applies only to machines in non-commercial members’ clubs.

Category B4 machines have maximum stakes of £1 and payouts of £250. These can be found in casinos, licensed betting offices, bingo premises, and members’ clubs.

Category C machines have stakes limited to £1 and payouts to £70. These can be found in adults-only zones of licensed FECs, and in alcohol-licensed premises.

All machines in categories A through C are playable by adults only.

However, category D covers machines that can be used by customers of any age. Maximum stakes are either £0.10 or £1, depending on the type of machine – this category covers types such as crane grabs and coin pushers. Maximum payouts range from £5 to £50, again depending on the type of machine and the cash/non-cash mix of the prize, although the total cash element can never be more than £8.

BACTA estimates that as of last year there were around 250,000 machines in categories B through D in operation. Of these, nearly half are category C machines. The next biggest category is D, accounting for around 70,000 machines, followed by B2 (27,000), B4 (15,000), and B3 (12,000). B1 is by far the smallest category at around 2500 machines.

There is no legal minimum percentage payout for gaming machines (a category which does not include automated casino machines or lottery machines), but the percentage return or the odds of winning prizes must be displayed to customers on the machine.

Annual licences for category A to C machines range from about £900 to £6000.

One recent change is the removal of section 34 permission for gaming machines. Under Britain’s 1968 Gaming Act, section 34 permits allowed businesses such as takeaway food shops, minicab offices, and small hotels to provide gaming machines. But these permits ceased to be valid on 31 July 2009. Local authorities, however, can still allow gaming machines when the premises are licensed to serve alcohol.

Problem gambling

Problem gambling affected around 0.6 percent of adults, or 284,000 individuals – a percentage that did not rise between 1999 and 2007. The figures on self-exclusions suggest that problem gambling is most rife (or at least most often recognised) in casinos.

About 6000 self-exclusions were recorded by casino operators, with about 270 breaches – or 4.5 percent of the total self-exclusions – occurring and about 730 individuals, or 12 percent of the total self-exclusions, cancelling their exclusion as soon as they could.

By contrast, AGCs recorded only 2250 self-exclusions and FECs an unsurprisingly much lower figure of 200. Breaches of self-exclusions in AGCs and FECs were, as a percentage of the total, roughly on a par with the casinos’ experience, although AGCs noted a slightly higher figure of 6 percent. What is striking, however, is that those self-excluding from AGCs and FECs were far more likely to cancel their exclusion after the minimum period: 23 percent in AGCs and 33 percent in FECs.

AGCs and FECs also recorded far more cases of under-age gaming than casinos, doubtless because of lower levels of security: 313 in AGCs and 157 in FECs, a total of 470, against just 11 in the casino sector. There were also many more failed attempts by youngsters to game illegally in AGCs: 4300 incidents of people under the age of 18 entering an AGC were noted, against only 44 in casinos. No figures were reported for illegal entry into the adults-only zones of FECs, and children are allowed in the other parts of those centres.

More research soon

More up-to-date authoritative data on British gambling should be available shortly. A report based on the 2010 British British Gambling Prevalence Survey, the third national survey on gambling participation and problem gambling in the country, with a sample of more than 7500 respondents, will be published in February 2011 and the full data set will be made publicly available in spring of that year.

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