U.S.A. - Coin-operated pool is booming.
By almost every significant yardstick, informed sources say the industry's most profitable equipment category remains on an upswing. Those factors include per-table revenue increases; league and tournament growth; percentage of operator-owned versus location-owned tables; and most recently, expansion into new and better types of location.
Even the twin threats of recent terrorist attacks and a nationwide economic recession have not dampened the category's robust health. If anything, these challenges may boost interest in pool, some operators say.
It may seem strange to assert that an ongoing international and domestic crisis could result in fuller cash boxes for pool tables. After all, revenues for tavern amusement equipment frequently decrease when compelling news events draw patrons' attention to location TV monitors.
But operators say any recent dip in earnings due to the terror crisis appears to be a temporary aberration in a generally strong year. Further, they add that stressful times also prompt players to seek distraction by playing the classic game of pool.
"You'll find we're down [because of the impact of Sept. 11] but it's coming back," said Valley 8-Ball League Association (VNEA) president Tom Elum of Elum Music Co. (Massillon, OH). "Our players still want something to do. They want to have an outlet that gives them a chance to be active. They don't want to obsess on war news all the time. So pool league play is in fine shape these days."
Based in Bay City, MI, the 22-year-old VNEA is the industry's leading pool promotion organization with nearly 400 operator members and over 80,000 registered players in 42 states and 17 foreign countries.
Pool operators also expect to benefit from the impact of the larger economy this year and next. During tight economic times, street operators expect that the sport of billiards , like coin-op amusements generally , will benefit from players' desire to seek out more low-cost, affordable entertainment.
"Everybody can afford 75¢ or a dollar to play a game of pool," Elum said. "In today's economy it's one of the best values around. And the increased revenues that league play builds in locations really helps bars keep their customer traffic going. That's important in times when things might otherwise fall off a little bit."
"The biggest challenge facing coin-op pool today," joked Gregg Elliott, VNEA executive director, "is finding enough collectors!"
VENDING TIMES Census of the Industry 2001 issue revealed that pool remains the top-earning product for most operators for the second year in a row. If anything, per-table revenues are increasing as more operators raise play pricing and as they promote pool more aggressively with such innovations as summer leagues.
As shown by the Census, pool tables lengthened their lead on other categories in the earnings race during 2000. Gross revenues from coin-op pool grew from $1.56 billion in 1999 to $1.73 billion last year.
Per-table revenues on average jumped 8.3% during the same period, putting about $8 more in the cash box of the typical pool table. Higher play-prices helped achieve this increase; more than half the operators surveyed by V/T reported their pool tables are set on $1 play. An increasing number of U.S. operators are finding success with $2 price points in upscale venues.
Even small town and rural locations increasingly can support $1 play, operators report. "It's not the most common price but it's the most popular price," said VNEA's Elliott. The average weekly revenue from a coin-op pool table in 2000 was $104, according to the V/T Census.
Consumer sales of pool tables are also booming, with tens of thousands of units , at the very least , going into private homes each year. Far from taking players away from coin-op pool, the consumer pool boom appears to be adding to the momentum for coin-op play and league membership.
"Players practice at home for our league nights, then come show off their skills with their friends," Elum noted. "If anything, home play on pool tables is helping us, not hurting us."
"The Internet has made it easier for people to find and buy home pool tables," Elliott reported. "But increased home ownership of pool tables is good for pool overall. Anybody who is playing more pool at home, is also very likely playing more pool in public venues. Obviously, that's good for VNEA and it's good for every other pool league."
Apparently, the sole measure by which pool is not experiencing an increase, is coin-op table sales. Approximately 320,000 coin-op tables were on location in America last year, according to the V/T's 2001 Census study. The survey further showed that the number of coin-op tables on location nationwide only grew by a moderate 2.6% from 1999 to 2000, representing some 8,000 additional placements.
In a market where other unit sales of equipment in other categories such as countertops, kiddie rides, and prize venders are growing at double-digit rates, then, pool sales are steady , but hardly stellar.
Why haven't healthy pool table cash boxes prompted a sharp increase in pool table unit sales? Pool tables are long-term investments; with a good maintenance program, operators can keep the tables on location for 10 or even 15 years. Also, the number of pool-capable locations is fairly stable by most reports.
These factors result in a lack of pressure on operators to significantly expand their purchases of new pool tables. The dynamic of full cash boxes from equipment that needs only occasional replacement, provides yet another reason why the industry is facing a well known paradox. That is, street operators by and large report themselves healthy and profitable , while manufacturers of staple equipment often report slow or flat sales.
Accordingly, pool table manufacturers have offered a growing and varied series of new models in recent years, aimed at making pool even more attractive in various niches. There are classy models for upscale locations, glow-in the-dark blacklight tables for gentleman's clubs, and smaller-footprint tables for smaller taverns. This fall, to cite just two specific examples of the trend, both VDLP and Global Billiards are both launching new additions to their already extensive lines. Great American Recreation Equipment is updating and enhancing its coin-op table game lines to meet the demand.
In addition, at least some factory executives have sought to increase pool table sales by pushing an ambitious agenda: they want to bring pool into locations that may previously have been considered unlikely.
"It should be our charge as an industry to seek out new venues for pool," declared Dave Courington, vice president of sales and marketing for the Valley division of coin-op pool table manufacturer Valley-Dynamo Limited Partnership. He continued: "Things are changing in the location base and we've got to be more adaptable and change with them. Starbucks and other coffee houses, for example, might not be the best site for a pool table. But it might not be a bad one, either. That's certainly where the people are."
VNEA leaders believe pool is already finding acceptance in new types of locations. "Our regional, state, and multi-state chains are now putting in operator-owned pool tables," declared VNEA's Elum. He cited chains such as Buffalo Wild Wings, Scorchers, Fox and Hound, and other sports bars and family establishments which, he said, now feature pool.
POSITIVE PUBLIC ATTITUDE
"I have five Buffalo Wild Wings stores on my own pool route, and even the smallest store has made room for a pool table," Elum advised. "We are placing pool tables in many locations that never thought would have had them before. These locations are embracing pool because it is a game that attracts and holds a good, solid customer base. The stigma against pool players is gone. Today's player is seen as a valuable customer. It is not the case at all that pool is seen as bringing in an 'undesirable' element."
Some observers believe that the number of traditional pool locations across America , specifically mom & pop bars , has been shrinking for over a decade and continues to do so. "The number of locations and operators are both shrinking," said Valley's Courington. "We have to take non-traditional approaches to keep pool growing and offset the areas where it's losing real estate."
The editorial staff at Night Club & Bar magazine have long endorsed this view of the tavern market as shifting away from mom & pop taverns. The publication holds that neighborhood, working class establishments are rapidly disappearing, replaced by branded chains that target middle class consumers and the business lunch crowd.
Other coin-op pool professionals concede that increased enforcement of drunk driving laws has hurt the neighborhood bars. But they assert that this location has stabilized. "I don't see that we're losing many pool locations," VNEA's Elliott said. "The upscale pool halls, which enjoyed a vogue for a few years, are fading away to some degree. But the mom & pop locations are solid." Added Elum: "That's our experience in Ohio as well. We don't see mom & pop bars or neighborhood taverns going away."
Dollar coins have apparently played a minor role in the increased revenues achieved on pool tables, although table manufacturers and VNEA both support the new currency. "There simply aren't a lot of dollar coins on the street," said Elliott, "but we use it in all the tournaments now. The changers for all of our events, from the national championships on down, are all set on dollar coins."
"The new coin is just not accepted by consumers," Elum agreed. "Our coin mechs all accept the new and old currency, but players really don't use the Golden Dollar. I believe dollar coins will only be successful if the government gets rid of the dollar bill."
Another factor helping to increase coin-op pool revenues may be growing participation in the sport by women, according to Elum. "The women like to play because that's where the men are," he said. The VNEA president noted that some operators run separate women's leagues and competitions, while his own business runs mixed leagues.
VNEA itself (along with other pool leagues administered by such groups as the Billiards Congress of America and the American Poolplayers Association) remains a major factor in the ongoing success of coin-operated pool. The vitality and impact of leagues in bolstering the success of coin-operated equipment, most definitely including pool, offers dramatic evidence that marketing is crucial to the industry's success.
VNEA's success in particular also demonstrates that street operators , viewed by some as passive businessmen and women , can rise to the marketing challenge. As Clyde Knupp of Amuse-O-Matic (Fort Dodge, IA) once expressed it: "I don't view myself as a coin machine operator but as a sports marketing specialist."
A classic case of finding strength in numbers, VNEA is operator-owned and directed, although strongly supported by more than 20 manufacturers of pool tables and billiard supplies. VNEA allows member operators to offer taverns guaranteed customer traffic and loyalty , on the strict condition that league play will only come to any location in which the pool table is operator-owned. This is the single most fundamental principle of VNEA, and it accounts for the fervent enthusiasm that its operator members feel for the organization.
"In order to have a VNEA charter, you have to be an operator and your leagues must play on 100% operator-owned pool tables," said president Elum. "This offers the location an incentive to take an operator-owned table, and it's a big enough incentive that they have to have it , because players want to play in the league. In my own area, I have been able to purchase a significant number of tables back from locations by offering VNEA league support. VNEA gives you leverage that you never had before. That was the reason VNEA was formed and it works 100%."
VNEA's May, 2001 national championship, held at the Las Vegas Riviera, was the association's largest and most successful such event in the organization's history. Approximately 10,000 players came from all over the U.S. and overseas to compete in matches for three days on 250 pool tables in Riviera ballrooms. These players also enjoyed a series of parties, dinners, ceremonies, and other entertainment. "VNEA just keeps growing!" said Valley's Courington. "It's absolutely phenomenal that year after year, the event outdoes itself."
Next year's VNEA finals, also set for May at the same venue, will offer $600,000 in cash and prizes.
KEEPING IN TOUCH
VNEA is moving steadily into the Internet age. The organization's website posts information on regional state and local tournaments, as well as the annual Vegas championships, and maintains a list of master players. The quarterly magazine for players is still sent via U.S. Mail at present but will be posted online soon, officials said. VNEA administrators already send regular email newsletters to the group's board of directors and operator membership.
Elliott and Elum report that VNEA gains an average of 50 new operator members per year; this year 35 new operators were recruited. This means the overall membership is stable, with new members joining at roughly the same rate , or perhaps a bit better , than is needed to offset losses from retirements or route consolidations.
Active recruitment of new operators by VNEA is performed chiefly through face to face contacts at trade shows and occasional mailings. Clearly, however, the organization has already achieved impressive market penetration after nearly a quarter century of existence. And that means sheer word of mouth (and competitive pressure) is the single biggest factor helping prompt more U.S. operators to join up.
"A lot of the impetus for new operators to join VNEA comes when their competitors join and they see the positive impact on pool revenues and the ability of VNEA charter holders to convert location-owned tables to operator-owned tables," said Elliott. "After 22 years, most operators know about us. But yes, there is room for more growth. You'd be surprised how many operators, even today, still don't know about leagues."
Existing league operators could also expand their market and earnings for pool through even more innovative use of league programs, some pool experts believe. Examples include youth leagues, summer leagues, and experimentation with pool leagues in new types of locations that have not traditionally supported them.
"Typically in every bowling center, the game room has pool tables," pointed out Valley's Courington. "But often, those tables simply sit there as a filler piece to pacify the kids while the parents are bowling. Yet bowling centers are 'league central' , and operators should think about setting up leagues in those venues. A junior league format, too, would be a great way to expand our player base and bring new blood into the market."
Any operators who decide to follow these ambitious suggestions will find extensive support ready and waiting from VNEA, said Elliott. "We offer tons of different options," he said. "When times get like now when there is not a hot game or the economy is a bit down, operators do respond by running additional leagues , corporate, nine ball, and 20 other alternatives. Those become much more popular."
International player participation has proved another long-term growth opportunity for VNEA. Overseas membership is trending up, although officials say the impact of the international terror crisis , and the sharp drop in airline travel , may hurt overseas participation in the league or its Vegas finals next year.
In the eyes of the nation's most successful pool operators, then, pool tables and league support are so deeply intertwined as to be indistinguishable. "League support is a powerful revenue-generating tactic," declared VNEA's Elum. "League nights create evenings where your bar loses a slow night and suddenly has good business. Food sales go up; beverage sales go up; people stay there for three and four hours a night. And they all practice, as well as playing competitive matches, so your pool revenues increase significantly. I simply can't understand a company that is afraid of league promotion or won't try it."