Supplementary evidence from BAPTO
Following the oral evidence given to your Committee
on Tuesday 9 December by Mr Bob Hayward, Mr Nick Bish, Mr John
McNamara, Mr Giles Thorley, Mr Giles Kendall, Mr Ted Tuppen and
Mr Simon Townsend, we would like to make some observations on
replies given by them to questions posed by members of your Committee
relating to gaming machines and the machine tie.
We enclose the relevant questions and our observations
(not printed here).
We also enclose the relevant pubco machine rent
schedules and independent information as to what rent pubco tenants/lessees
should be paying for their gaming machines.
This documentation proves that pubco tenants/lessees
are paying substantially more rent for their machines than the
free of tie landlords as well as the pubco having 50% of the net
takings and taking into account the tenants share in the rental
calculations.
The pubco involvement in the supply of amusement
equipment via the "approved operator" system also drives
up the rent pubco tenants/lessees pay for all their ancillary
equipment ie. pool tables, quizzes, digi juke boxes.
We are sorry for being so late in making this
submission, there was a delay in getting some of the evidence
together.
Q181 Mr Bish speaks for his members many of
whom are pubco tenants/lessees and are the victims of the machine
tie and realise the unfairness of the situation they are in. However
Mr Bish underestimates the amount the pubcos actually take from
the fruit machine, after taking into account RPI in the rent calculation
the pubco ends up with over 90% of the fruit machine takings.
BAPTO gave illustration how this works out in our original submission.
Q182 Mr Hayward comments the pubcos have experts
on fruit machines, this is rubbish, the real experts on fruit
machines are the players (the pub customer) if a fruit machine
takes money over a period of time its good, if it doesn't its
bad, it's as simple as that. Operating amusement equipment is
not rocket science it is common sense. I feel qualified to pass
this comment as I have operated amusement equipment successfully
for the past 35 years. Most pubco tenant/lessees would be more
than capable of managing the amusement equipment on their premises.
The comments made by Mr Bish on the differences
on the rents of fruit machines is easily explained by the amount
of the "royalty payment" demanded by the pubco, this
amount could easily vary from pubco to pubco by as much as £16.50
per week, per machine.
Q183 That is exactly what the pubcos do they
tell their tenants/lessees who will supply them with amusement
equipment, in most cases with no consultation whatever.
Punch Taverns recently entered into an agreement
with Sceptre Leisure to supply amusement equipment to 30% of Punch
Taverns estate. How do Punch Taverns know that 30% of their tenants
want to be supplied by Sceptre Leisure? They don't, but the supplier
will be imposed on them anyway because it suits the pubco.
These tenants want to be independent businessmen
running their own businesses and making their own decisions, not
being told who supplies them and on what terms. The tenants are
capable of making these decisions themselves.
Q185 Enterprise Inns and Punch Taverns expect
to make £25 million each from machine income in 2008 the
same as they did in 2007 it is interesting at a time when machine
income is down the pubco income remains the same, this is achieved
by taking a bigger percentage off more machines (ie juke boxes,
quizzes, pool tables etc) at the expense of their tenants/lessees.
PUNCH TAVERNS
PLC COMPARE
2007 WITH 2008
|
| Punch financial report shows: | 2007
| 2008 |
|
| Total awp | 25m | 25m
|
|
| |
|
ENTERPRISE INNS
PLC COMPARISON
OF 2007 RESULTS
WITH 2008
Q188 The BBPA and Punch Taverns did in fact make representations
to government on the issue of gaming machine stakes and prizes,
however the attached list shows that they were by no means on
their own and should not be claiming too much credit for whatever
is achieved.
Q212 It is interesting that Mr Tuppen goes out of his way
to mention one recommendation of the 2004 TISC but chooses to
ignore what is probably the strongest recommendation of that committee,
"we recommend that the AWP tie be removed"
Q290 It would be interesting to know if during his time as
club secretary Mr Wright had any difficulty finding a suitable
amusement machine supplier and what was his experience of being
a "Free of Tie" landlord with respect to machine supply.
Q298 Mr Thorley claims that Punch Taverns tenants pay less
rent for top of the range fruit machines than free of tie landlords.
The enclosed price lists prove that Punch Taverns tenants pay
between £19.98 and £21.98 more per week for the same
machines and Enterprise Inns tenants pay between £20.94 and
£23.94 more per week for the same machines.
Mr Thorley was equally confused and peddled the same lies
to the 2004 TISC inquiry as the following extract from his evidence
shows.
Q553 Sir Robert Smith: You have mentioned already that you
take a 50/50 share of profits from the slot machines. Do you take
any royalties from machine companies for allowing them to put
machines in?
Mr Thorley: We use it to subsidise the rent. The rent in
our estate has gone down by seven percent in the last two years
as we have negotiated better terms. Because there are reasonable
good statistics on the machines.
Q554 Sir Robert Smith: Sorry, do you charge?
Mr Thorley: To the extent we get royalties I am not entirely
sure because there are a large number of different suppliers and
each contract will be subtly different. We have used it to reduce
the levels of rent. I can give you some statistics but the levels
of rent we charge for machines are materially lower than are available
in the free trade and we can give examples of that. Moreover they
have fallen I think by seven per cent in the last year.
The enclosed rent lists (not printed here) cover the
period December 2008 to January 2009. The AWP directory (which
covers the same period as the rent list) is an independent publication
available to licencees to inform them of the quality, date of
manufacture and rent they should expect to pay to their machine
supplier if they negotiate the terms themselves.
7 January 2009
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