$3 Billion+ to introduce $1 bet limits on poker machines

Australia’s gaming machine manufacturers today provided advice to the Gillard Government and to the Greens on the cost to introduce a $1 maximum bet limit on all Australian gaming machines.

“The cost of converting all Australian gaming machines so that they provide a maximum bet of $1 and a maximum prize of $500 will exceed $3 billion” Gaming Technologies Association CEO, Ross Ferrar said.

The Gaming Technologies Association’s members supplied almost all of Australia’s existing gaming machines and have unrivalled expertise in terms of the design and supply of gaming machines in Australia and around the world.

Members of the Gaming Technologies Association include Ainsworth Game Technology, Aristocrat Technologies, Aruze Gaming Australia, Bally Technologies, IGT Australia, Konami Gaming Australia, Shuffle Master Australasia and WMS Gaming Australia.  These are the people who are responsible for making any changes to the game software in gaming machines, including those required to implement changes to the Maximum Bet.

“Because all existing Australian games and gaming machines are approved by State regulators, it is not possible to simply adjust a bet limit.  Changing the bet limit and maximum payout requires a complete game change on every machine” Mr Ferrar said.  “Australian gaming machines are quality assured and independently tested prior to submission for approval to operate.”

For a new, technologically advanced gaming machine the cost to change the game will be around $5,000.  However, for the 75% of Australia’s gaming machines that are older than 3 years, the cost will be significantly higher.

“More than 50% of Australia’s gaming machines are more than 5 years old. These machines are equipped with old technology that cannot be modified to provide a $1 maximum bet and a $500 maximum prize.  They will need to be replaced at around $25,000 per machine.

“An estimated 85% of gaming machines located in Australia’s country and regional pubs and clubs are very old and will need to be replaced to comply with a $1 bet limit” Mr Ferrar said.
 
This advice is consistent with the Productivity Commission, which found that: 

“Immediately implementing a much lower maximum bet limit for all existing gaming machines would not be feasible for regulators and gaming machine manufacturers and not cost effective for venues”…. ”Many existing EGMs would need to be replaced and others retrofitted with new software/hardware….there is only limited capacity for gaming machine manufacturers to re-design existing games to be compatible with such a bet limit.”1 (emphasis added)

Australian gaming machines –
Cost to change to $1 bet limits/$500 payout limits

a) 25% (50,000 gaming machines) less than 3 years old = around $5,000 per machine ($250 million)
b) 25% (50,000 gaming machines) 3-5years old = $10,000 per machine ($500 million)
c) 50% (100,000 gaming machines 5+ years old = $25,000 per machine ($2.5 billion)

Total cost = $3.25 billion