Statutory Code: Coin operated gaming machine suppliers call for end to pubco tie

BAPTO has told the Government that tenants take significantly less money from pool tables, juke boxes and quiz machines than their free-of-tie counterparts and that scrapping the tie would free up the market for smaller suppliers.

The comments come in a submission to the consultation on plans for a statutory code for pub companies, which proposes banning the gaming tie.

Tied tenant​

BAPTO said a tied tenant would take £23.34 on a pool table that generates £80 (less VAT of £13.33, rent of £20 and the pub company taking £23.23, or 50% of the remainder). In contrast, a free-of-tie tenant would take £52.67, BAPTO said.

It said free-of-tie tenants would take almost three times as much as their tied counterparts on SWP machines (£33.34 against £13.34 for every £80 generated) and juke boxes (£30.20 against £10.56).

BAPTO chairman Michael Dicks said: “The more the machines take, the more and more disadvantaged the tied tenant. “There is no justification for this situation to exist and even less for it to be allowed to continue.”

Pubco attitudes​

Dicks said pubcos’ attitudes to the tie is worse now than it was before the Trade & Industry Select Committee report in 2004 that called for an end to the machine tie. He said: “A free-of-machine-tie option for tenants will remain a dream until the removal of the machine tie is removed by statutory legislation history proves that.

"The removal of the machine tie will create many jobs in the amusement machine supply industry and would breath new life into many small companies.

"At the moment there are three large companies and about 50 other smaller companies supplying machines under the tied system. There are 600 potential suppliers licensed by the Gambling Commission to supply this market.

"If the tie were removed it would introduce transparency and competition that would lead to lower rents and better service for tenants, the only losers being the pubcos and the small number of existing suppliers who would have to compete for the business on a level playing field."

"The pubcos have been given long enough to sort this issue out (nine years). The last thing that is needed now is to give them more time, they have no intention of giving up the machine tie unless compelled to do so.

"The only answer to this issue is to make the removal of the machine tie part of statutory regulation, no ifs and not buts."

'Rogue suppliers'​

BAPTO’s view is in contrast to that of major AWP suppliers, who have argued that removing the machine tie would leave pubs vulnerable to “rogue” suppliers.

Gamestec, which suppliers of 30,00 machines, predominantly to pubs, told the Department of Business Innovation & Skills that there could be a “Wild West-style free for all in the tenanted sector”.