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Issue Date: Vol. 52, No. 2, February 2012, Posted On: 2/5/2012


Mixed Picture In Ordering Activity At IMA In Düsseldorf And Gratifying Increase In Visitor Numbers


PRESS RELEASE
coin machine, coin-op, vending machine, amusement business, arcade game, jukebox, gaming machine, International Trade Fair for Amusement and Vending Machines, IMA, Reed Exhibitions Deutschland GmbH, German vending business, Amendment to the State Treaty on Gambling, Düsseldorf Exhibition Centre, Paul Gauselmann, VDAI, German amusement and vending machine association

Source: Reed Exhibitions Deutschland GmbH | Released Jan. 25, 2012


International Trade Fair for Amusement and Vending Machines: January 17-20, 2012, Düsseldorf Exhibition Centre


Against the background of a new Amendment to the State Treaty on Gambling and the first state legislation on amusement arcades ordering activity at IMA presented a very mixed picture. By and large, the industry was cautious as far as long-term investments were concerned. Demand for commodities with a depreciable life of up to five years, on the other hand, was noticeably stronger. The background is that a majority of state legislators aim at large-scale expropriation of the industry in five years time.


Düsseldorf -- Jan. 20, 2012 -- After four days at the Düsseldorf Exhibition Centre, the 31st IMA closes its gates. With 9,512 visitors and an increase of 7.5 percent year-on-year, the trade fair of the German amusement and vending machine industry records a gratifying increase in visitor numbers. This is especially true in view of the uncertain legislative situation. Bremen and Berlin have already passed new state laws on amusement arcades. In other states they are planned. All of them will have ruinous consequences for manufacturers and distributors, and for operators of amusement arcades. Applications for all licenses granted so far will have to be resubmitted in five years' time.

A large variety of exclusion criteria will apply: minimum distance from children's day care centers, schools, churches and other amusement arcades. This means that the state legislators are drawing a grid of no-go locations over cities and communities which comes close to a total prohibition of commercial "small-scale gambling". Furthermore, there are plans for a ban of so-called multiple licenses, which were allowed by the Federal Administrative Court as far back as 1984. Against this background the widespread uncertainty is understandable. Another reason for the increase in visitor numbers since in such times entrepreneurs expect manufacturers and associations to come up with products and advice for the future.

A very sombre view of the future prevails among apprentices and employees in the industry. On the way to the IMA opening ceremony, therefore, guests had to pass an impressive line of apprentices. 250 young people had come to Düsseldorf to draw attention to their situation with posters, banners and T-shirts. In close cooperation with the Chamber of Industry and Commerce, the industry had fought many years for setting up two apprenticeship training specialities for amusement machine technicians which now, as a result of state policies, will be practically abolished. In addition to these young people, there is a workforce of more than 70,000 fearing for their future in the amusement industry. More than 70 of these are women.

If Siegfried Kauder, the Chairman of the Legal Committee of the German Federal parliament has his way, however, these people do have a future. During the opening ceremony he told them: "The government must not simply "flatten" the competition and eliminate it just because it has the possibility to pass regulations. Ladies and gentlemen, I think it shameful that a group should have to defend itself by court action to ensure that right remains right. .... What is happening at the moment in the amusement arcade sector is something a professional politician must not tolerate."

Large sections of the German amusement machine industry, consider the courts their only hope. Here, they are confident, since a broad phalanx of renowned legal scholars are almost unanimous in considering the new Amendment to the State Treaty on Gambling as going against the German constitution and European law. Nevertheless, the uncertain prospects for the future were of course reflected in ordering activity at the trade fair. Long-term products remain on the shelves. On the other hand, operations in amusement arcades and gastronomic establishments for the next five years with a safe legal perspective are noticeably upgraded. Interest focussed on gambling machines, cash management for arcades, interior furnishings and software updates to run operations. In the area of cash gambling the triumphant success of multi-game devices continues. One reason is the fact that due to the ever-shrinking expense per hour for gamblers, gambling has come close to any other commercial leisure activity. With an average expense of 10.89 € per hour, as found by the Fraunhofer-Institut, going to the cinema or the fitness studio, skiing or a night at the disco are no cheaper but rather more expensive and often less exciting. Another reason for the success of these devices: gambling machines with more than different 30 games and creative video animation are an international success with the Internet Generation.

Development has been excellent for the sports betting segments at IMA. In contrast to last year when the city of Düsseldorf had caused legal chaos in this segment, the exhibitors were able to pursue their business unhindered and reported strong interest this year. This interest is due to the worldwide boom of this type of betting. The sports betting community is hoping for a turn towards liberalization throughout Germany, the strongest market in Europe. In particular, the industry hopes for a No from the EU Commission to the new Amendment to the State Treaty on Gambling. The suppliers criticize that the intended granting of a mere 20 licences is entirely arbitrary and the intended tax burden is far heavier than that imposed in any other country.

The suppliers in the Bowling World section were also very satisfied with IMA. Apparently arcade operators are considering investing in this segment, in order to diversify and thus make their business more crisis proof. On the other hand, interest in amusement and vending machines is growing among bowling alley operators. These two trade fair segments have been complementing each other in a positive way for many years.

Paul Gauselmann, chairman of the industry association of the German amusement and vending machine industry (VDAI), is also waiting for a clear word from the EU and the courts. According to him, the industry invested millions of euros over the past five years, which will not pay off by any means in case of a 5-year transition period. Rental contracts, usually with a term of 10 to 15 years, long-term depreciation for buildings and equipment and ever- lengthening depreciation cycles render this impossible. As a consequence, Gauselmann predicts legal action to claim damages. Legal experts estimate these damages at more than four billion euros. If they should materialize, it would be the local authorities that would bear the brunt of these claims, which may be one reason why state politicians do not seem to be much interested in the legal situation, says Gauselmann.

In 2013 IMA will take place from 15 to 18 January at the same location.


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