Poker machine prices continue to climb. These popular games are the most expensive they have been in six years, a result of pokie licensees see greater regulatory certainty in pubs. According to the Australian Financial Review, there has been a significant jump in the price of pokies over the course of the past year.
In New South Wales, poker machines are selling for $320 000 – a huge increase from their $220 000 sale price in 2014. The increase in price is partially due to Tony Abbott’s decision to scrap poker machine reform in 2013. The former government had made plans to introduce a pre-commitment scheme in order to curb gambling spending among players across the country.
However, Abbott decided to forego the implementation of the reforms. This decision has provided gaming club owners and operators with an updated valuation of pokies. Now, they are well aware that pokies have an impressive earning capacity, which is reflected in the increase of the price of the games. Another factor is the potential shortage of licenses for sale.
Since pokies have greater earning potential than previously recognised, license holders are reluctant to sell their games. Additionally, there has been an increase in sinking lid policies across the country, which aim to limit the number of pokies that can installed in any one area. A scarcity of licences coming up for sale has heightened demand for the machines.
There are also signs that punter spending remains strong in the sector, as evidenced through revenues from gaming machines collected by the NSW Office of State Revenues, which are on the rise.
"Since 2008 and 2009 when the pubs sector was really struggling, there have been big improvements in certainty surrounding regulatory reform with respect to poker machine entitlements, and that confidence has an impact on prices," says Morgan Kelly, a pubs specialist. Another interesting development in the pub industry is the new focus on dining.
More and more club and pub owners are putting more effort into offering quality dining experiences, ensuring more family-friendly environments to help boost revenue while pokie income remains stable.
Mr Kelly continues: "Pokies are sensitive to interest rate movements to an extent, but they're certainly not as sensitive as food and beverage sales … when you've got high disposable income, food and beverage sales tend to go up by a far greater proportion, but pokies are relatively stable”.
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