APPENDIX 2
Memorandum from the British Amusement
Catering Trades Association
1. INTRODUCTION
1.1 BACTA (British Amusement Catering Trades
Association) is the trade association for the British amusement
machine business. It represents the operators of seaside amusement
centres and arcades, inland licensed gaming centres, machine suppliers
and manufacturers and distributors.
1.2 BACTA has 1,200 nominated member delegates
representing c 600 companies, ranging from large PLCs to many
smaller family businesses. They comprise 85 per cent of the industry.
1.3 There are around 250,000 coin-operated
gaming machines and 175,000 coin-operated amusement machines in
use in the UK, situated in diverse locations including pubs, seaside
amusement centres and arcades, inland licensed gaming centres,
casinos, bingo halls, members' clubs, licensed betting offices
(LBOs) and motorway service areas.
1.4 Machine stakes and prizes for gaming
machines vary considerably throughout these locations, but the
most common type is the all-cash machine with a maximum prize
of £15. There are 166,600 all-cash machines mostly found
in pubs, inland licensed gaming centres, bingo halls and LBOs.
There are also 1,200 high prize club jackpot machines in casinos.
The highest prize that can be won on these machines is £1,000.
Lesser maximum prizes of £500 and £250 are available
on jackpot machines in bingo halls (200) and members' club (around
27,000) respectively. All jackpot and all-cash machines can only
legally be played and prizes paid out (even if £1,000) by
means of coin.
1.5 Approximately £10.8 billion is
wagered annually in coin-operated amusement and gaming machines,
of which all-cash machines account for £8.5 billion is paid
out overall in prizes.
1.6 The industry employs 23,000 people and
pays £771 million annually to the Treasury in taxation.
2. BACTA AND
THE ROYAL
MINT
2.1 The gaming and amusement machine industry
that BACTA represents is a major coin machine user and its relationship
with the Royal Mint is vitally important.
2.2 However, there have been instances over
the last few years when communication between the Royal Mint and
machine manufacturers, especially those specialising in the manufacture
of coin validating equipment, has not been what is required.
2.3 In the paragraphs below, which deal
with the £2 coin and other coin releases, details are given
of what went wrong.
2.4 BACTA wants to ensure that similar incidents
do not occur in the future. They are not only frustrating, but
they impact on the industry with delays and unnecessary and unrecoupable
costs.
2.5 The possibility that the UK may, in
the near future, adopt the euro, which will result in the biggest
and most logistically difficult coinage change in the UK's history,
must also be borne in mind. Euro problems that can already be
anticipated are discussed below.
2.6 The most essential requirement is an
improvement in the Royal Mint's communications with the industry
and especially with machine and coin validator manufacturers.
3. NEW COIN
RELEASES—EXAMPLE
OF THE
£2 COIN
3.1 It is especially important that the
Royal Mint work more closely with major coin-machine users when
new coins are being minted. The circumstances surrounding the
initial introduction of the £2 coin a couple of years ago
are a good example of why. (Appendix 1 sets out the timetable
for the introduction of the £2 coin and the problems experienced).
3.2 The circumstances surrounding the release
of the £2 coin were frankly embarrassing and the mistakes
then made imposed additional costs on coin-machines industries.
3.3 The £2 coin is bimetal and the
problem stemmed from inadequate quality control of the joint between
the two metals.
3.4 An original sample was produced and
given to the industry, but when the production run started the
quality was substantially different. Production had to stop and
this delayed full production for several months.
3.5 At the same time, the industry had begun
modifying machine coin-handling validators, which all had to be
reprogrammed when the final production quality was agreed. This
led to security issues and doubled the conversion costs.
4. OTHER COIN
RELEASE ISSUES
4.1 £1 coin—different versions
4.1.1 Electronic signature variations have
existed between some of the £1 coin versions resulting in
poor acceptance by machines. The most obvious example was the
Scottish version introduced some years ago, where the embossing
produced a slightly thicker coin.
4.1.2 There have been some recent (and as
yet unconfirmed) reports that the new 2000 Welsh version of the
£1 coin has a variable acceptance rate.
4.2 New 10p coin
4.2.1 Confusion (and some incorrect validator
programming) resulted from two different pre-release samples—one
with squared milling to the coin edge and the other with rounded
milling.
5. THE EURO
5.1 If the UK should at some future date
decide to join the Euro, it is essential that the problems experienced
with the £2 coin do not arise again.
5.2 There are genuine fears that the euro
coins will be of a lower quality than existing national currencies.
This could lead to real problems with coin validators.
5.3 The one and two euro coins will be trimetal.
This could give rise to problems associated with ring to core
interface oxidation, which will affect coin repeatability. There
could also be difficulties for some coin validators in detecting
the three-layer core make-up.
5.4 There have been problems with variations
in the electronic signature of higher value euro coins. This has
to a certain extent been solved by widening tolerance levels.
However, these levels are in excess of what is currently employed
in the minting of British coinage and may lead to counterfeit
coins being undetected by validators.
5.5 The Royal Mint has provided BACTA with
its estimate of the breakdown of euro coins that will be produced,
should the UK adopt the Single Currency (see Appendix 2). There
will be 36.5 per cent less euro coins in circulation than the
current sterling coin population, representing a reduction in
value of 33.9 per cent (@ E1 = 60.2p). No explanation has been
given by the Mint of this proposed decline in coinage, which is
bound to have serious consequences for the industry.
5.6 The most popular play coin in UK gaming
and amusement machines is the £1 coin. Around 90 per cent
of machine plays are made with it. As the most numerous euro coin,
the E1 is expected to be the most popular. Comparing £1 with
E1 shows a reduction in numbers of 8.64 per cent, but a reduction
of 39.8 per cent in value.
5.7 If the same value of coins as currently
used were used after changeover, 39.8 per cent more coins would
need to circulate through the coin-handling units, with a corresponding
increase in coin-related faults, if indeed those coins were even
available.
12 January 2001
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