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Published:  29 November, 2011

Arcades and other leisure venues face security challenges which can lead to vastly increased insurance costs – not to mention the risks of theft and damage. Jon Bruford investigates what operators can do to increase on-site security

Any venue that allows members of the public inside is open to all manner of security and safety issues. On top of that, any venue that employs staff is open to even wider security threats. How can a manager counter these?

Not all staff are dishonest – the vast majority of people are honest and decent – but the bad apples can have a disproportionate impact on a business. In investigating this article, Euroslot heard anecdotal evidence of leisure venues’ operators writing off more than £100,000 per year in staff thefts...because to the operator, it’s as though this money never existed within the business. They don’t have to pay employer’s National Insurance on it, or tax; and their staff are paid minimum wage, so they “understand” why it happens.

Minimum wage is certainly a part of the issue of thefts within leisure venues. A member of staff paid £6.08 an hour who is asked to handle umpteen thousands of pounds in cash per week, then sees their boss turn up in a Mercedes, might well feel bitter. Perhaps it’s not the employer’s fault, but where crime is involved you cannot discount human nature.

Increasing wages could be one answer, though of course not every business can afford to pay more. Still, take away the perceived reason to steal, and you’ll likely see a drop in theft.

But it’s unlikely that it would disappear entirely. And, particularly where there is a high turnover of casual or seasonal staff, who may not have much commitment to a long-term relationship with the employer, the best thing operators can do is make sure their premises are as safe as can be.

After all, the more secure the premises, the lower the insurance premium, at least in theory. Says Simon Lines, operations director of Insurelink East Anglia: “Any measure the client can take to reduce potential loss will be seen in a good light by an insurer.”

Money troubles

From an insurer’s standpoint, the main problem is cash and the sheer volume of it that an arcade or other leisure venue might see in a given day. Explains Lines: “The main issue for amusement arcades and family entertainment centres is the amount of cash on the premises. Insurers obviously see that as being higher-risk, and insist on additional security measures which they wouldn’t necessarily for your average shop. What they require from a theft point of view would be a Redcare alarm system, monitored by a central station [i.e. an alarm monitored by the police] – though requirements vary from venue to venue, obviously.

“Good levels of physical security are also required – the type of locks on the doors, on the windows, are there security shutters, grilles on accessible windows, how the alarm system fits into it, where do sensors cover – they are all things an insurer will look at. The more security a client can put into a premises, the better chance the insurers will look more favourably on it.”

All that cash doesn’t just stay in a venue, though; it has to be moved at some point. And insurance policies have custodian clauses in them, which stipulate that when money is moved, it must be done safely. For example, such a clause may specify that when more than £1000 is moved to a bank or night safe, it must be taken by two able-bodied adults. These are requirements which an operator may not be aware of, and if they don’t comply it could affect any claim they make. Very large amounts of cash being moved would see an insurer require the venue to use a third party to transfer the money, for example Securicor.

An insurer would also not cover staff theft, unless extra cover was purchased for that; and in that case they would expect an employer to obtain references and take all reasonable measures to ensure staff are trustworthy. An operator could always credit-check potential staff as well as checking references, to give them some idea of the person’s history. It might seem like a big step from references, but if your business is handling hundreds of thousands of pounds in cash every year, it’s a small price to pay.

Insurelink’s Lines also suggests use of CCTV, both to help monitor staff moving money, and elsewhere: “CCTV has been very useful in respect of spurious public-liability claims, where people have claimed they slipped or tripped in an arcade or other venue, when they have not in reality.”

Cutting the risk

Another option is to minimise the amount of cash flowing through the business. Many venues both in Britain and abroad are going cashless, and the technology to do this is improving all the time. Eurocoin’s Colin Veitch says: “Clients are increasingly interested in removing cash payouts from machines, they want to centralise payout in a nice secure way. Increasingly, they are looking to do it in an unmanned product. What’s the safest place to keep cash? Something solid, made of metal, too heavy to steal, never needs a drink, holiday or toilet break…it’s easy to see why many arcade operations are interested in this kind of hub instead of individual machines paying out, though this would need to be done hand-in-hand with networking a venue.”

Smartcards are reasonably common in Europe, where the user tops up a card with cash on entering a venue, and then plays games or pays for goods with the money on the card. The UK would likely adopt these quicker than most countries, simply because we already use Chip & PIN debit cards almost everywhere we shop. That said, do people really want yet another card in their wallet alongside credit, debit and loyalty cards by the dozen? It might not be the most attractive option for all customers.

Ticket in/ticket out (TITO) is another option, where players put cash into a machine to play, but are then issued winnings or remaining cash via a barcoded ticket, which other machines in the venue accept. To cash out, they go to a single point – either a redemption terminal or a cashier’s window. So in terms of staff handling cash, there is really only one point of insecurity, and it’s much easier to monitor; and with TITO, machines have to be emptied far less often, though of course there is the expense of upgrading to the new technology.

Virtual wallets

An exciting option seen recently at the G2E expo in Las Vegas is from JCM, the cash handling company perhaps best known for its bill validators. On JCM’s stand was an exhibition of mobile wallet technology – and the best thing about it is that the payment method always stays with the customer. In fact, it belongs to the customer: it’s a mobile telephone.

M-commerce, as it’s sometimes known, has been around for a while (notably in Finland, home of Nokia, where two Coke machines went live for payment by mobile phone in Helsinki way back in 1997), but has not been widely used within the public gaming sector. With JCM’s in-progress solution, the player adds money to the phone using their bank card; the phone connects using a wireless network (presumably 3G or secure Wi-Fi would be needed for this to work flawlessly), and adds funds to the player’s wallet.

The player then goes to a slot or amusement machine, enters a password on the phone, and moves the money onto the gaming system so that they can start playing. After the game, the player’s wins or remaining cash come back to the phone. Quick, simple, and using an interface most people are very familiar with – and that they trust, because the gateway feels like it belongs to them. And as an additional benefit, in a large venue you can potentially have true customer-tracking, and all from the player’s use of their own phone.

With the ubiquity of the mobile phone and the rise of the smartphone, this will ultimately become a very attractive option. Until then, operators of every size need to use all the technological and management devices they can find to protect the large amounts of cash that most amusement businesses generate.

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