Select Committee on Treasury Appendices to the Minutes of Evidence


Memorandum from the British Amusement Catering Trades Association


  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.


  2.1  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.


  3.1  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.


4.1  £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.


  5.1  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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