The island state of Singapore has a reputation for regulation and control, and its coin-op activities reflect this, reports David Snook...

If Singapore is internationally renowned for anything, it is probably the republic’s ‘perfect state’ mentality, which strictly governs just about everything. You cannot even chew gum in the island state without incurring the wrath of the authorities. Those who live there, however, seem to relish the security that comes from this almost authoritarian jurisdiction. You are safe in the streets, no one breaks into anyone’s house and possession of drugs is a capital offence - as you are sternly warned on the intercom after landing at the island’s Changi Airport.

But to describe Singapore solely in terms of its dominant government is an injustice. It should be better known for its strategic importance, as the staging post between Europe and Australia, and the hub for business in south-east Asia with cultural and trading ties with both India and China, the two great powerhouses of Asia. Singapore is perfectly positioned for global access and, aside from being multicultural, it is also multilingual.

For tourism, it is the perfect stop-over for trips to and from Australasia and the Far East, somewhere to unwind and overcome the first ravages of jetlag. It must also be remembered, however, that Singapore is a destination in its own right, with its free port status and prices to match Hong Kong. The city-state has excellent tourism facilities and the superb Sentosa Island playground with its huge theme park. Not surprisingly, it has its coin machine industry too, which feeds off all these influences. And, like everything else in Singapore, the coin-op business is well regulated and carefully controlled.

The Geezer

My co-operative contact there, who prefers to identify himself (or, rather, not identify himself) as The Geezer, is nevertheless knowledgeable on the subject of the coin machine business in Singapore. “The leisure and amusement industry in Singapore is very well run and professional,” he said. “Most centres still operating are very nice and you don’t see the rundown corner shop type establishments you see elsewhere.

“Like all things in Singapore, the leisure industry is well controlled by the government and the departments concerned. The industry is well policed, licences are not too difficult to obtain, provided that you play by the rules and do what is required. Schoolchildren are not allowed in amusement centres in school uniform. This is just one of the rules operators have to abide by and the consequences for operating outside the government regulations are extremely harsh.”

He added: “The main reason for the drop in business for the leisure industry in Singapore was SARS. People outside this region don’t know or understand how serious the problem was and the problems it created for many businesses and the leisure industry was hit hard. I know people who had locations where turnover dropped by as much as 83 per cent but they still had 100 per cent of their overheads to pay. Many locations became unviable during and just after the SARS problem and closed their doors for good.”

Drop in arcade numbers

Singapore has around 50 amusement arcades, which is way down on the heady days of the mid-1990s, when there were well over 100 outlets operating. But the arcades have survived in face of the family entertainment centres, which have taken over the mantle of amusements in many other up-market south-east Asian countries. There is, in fact, only one family entertainment centre in real terms, which includes rides and other major attractions. The need for this type of outlet was also hit by the SARS outbreak, plus high rents. But most of the amusement arcades are in shopping centres and malls. The distinction with FECs in Singapore is that they remain arcades, rather than taking in the wider form of amusements, which normally typifies FECs.

Redemption is allowed in Singapore, but the rules are extremely strict for all forms of coin-operated games. A licence must be applied for in advance of siting any game. A photograph of the product has to be submitted with a detailed description of how the machine works. This has to go to the licensing authorities, who may ask to inspect and play the machine. Even then, if they are not satisfied that the machine matches their criteria, the operator may not be granted the licence for the game and that machine will not be legal for operation in Singapore.

In the case of redemption, it can be difficult to obtain licences, as the importer must be able to prove that there is a skill factor on the game. If you cannot do that then there is no licence. Games like Smokin’ Token are not licensed for operation in Singapore. Once the redemption machine has been licensed, it is operated with ticket payout and the tickets are redeemed at the central counter in the location for merchandise. Currently, there are only two companies operating redemption in Singapore, KBS Group and LAI, the Australian company.

There are some pusher machines, but not high numbers. Most were exported from Singapore a few years ago when a government ban was imposed on them. The ones still operating have been modified and fitted with a proven skill factor, where the customer can win tickets on a skill game as the token drops into the machine. The pushers pay out both ticket and tokens; the tokens to be replayed into the machine or other machines in the same location and the tickets to be redeemed for merchandise.

LAI is the largest operator in Singapore, together with KBS Group, Superbowl, Valibel, TKA and NTUC, who between them operate 40 of the 50 arcades in the country.

Hitting the headlines

Singapore hit the coin machine headlines earlier this year, when Merit Industries, the US touchscreen game manufacturer, worked with the local authorities to initiate a purge on copies of its games. Touchscreens are popular in Singapore and most pubs have one, while the arcades have several. The country has around 1,000, with Merit being the most popular, although many of the Megaforce games are copies. Other games such as electronic darts exist, but in small numbers. Electronic darts struggles to overcome the popular British version of steel-tipped darts, which is offered free in pubs and bars. Pool tables are extremely popular in Singapore and there are some dedicated pool rooms. Pinball has all but disappeared from the island, along with the jukebox. Kiddie rides, however, remain a strong market.

Another reason for Singapore to hit industry headlines this year has been the decision to permit two casinos on the island. It is perhaps not generally known that Singapore has its coin-operated payout machines already - and has had them for many years. Few visitors to the island actually see them because they are in the private members’ clubs, of which there are many.

Singapore Armed Forces Recreation Association clubs are numerous, and there are other private clubs, such as the Civil Service Club, which has three properties all with gaming rooms. Other outlets such as the Chinese Swimming Club, golf clubs and other associations, all have gaming rooms. The number of machines in each room is strictly related to the number of members the club has. Externally, the games appear the same as any international-style casino slot, but operate with a special Singapore program due to the government’s requirements and the high amount of tax (around 43 per cent) the Inland Revenue takes based on the monthly returns from each machine. Each new machine the club brings into its gaming room must be registered with the authorities, who must also be told which machine it will replace. Clubs cannot put in extra machines and the model coming out of operation must be exported from Singapore within a given timeframe or destroyed. Distributors cannot keep stocks of slots.

Currently, the most popular slot machine in the Singapore clubs is from Aristocrat, the major Australian manufacturer. Our information is that the company “seems to have done a really good job of producing machines capable of earning extremely well in Singapore, despite the government restrictions and regulations.”

There are also, of course, cruise ships operating out of the country, which offer superb gambling facilities. Star Cruises is the largest operator and offers a variety of itineraries from two to seven days. There is also New Century Cruise Line, which operates short cruises with gambling as the main entertainment on board.

The impact of the two new casinos in Singapore on the rest of the republic’s gambling market is difficult to assess. It is accepted that there will certainly be an initial impact when they first open their doors because of their sheer size and the wide range of facilities and attractions which will be on offer.

Machines in the island state remain a carefully run business which few tend to circumvent. The effect of the Merit ‘purge’ is an example of how severely the Singaporean authorities will react to wrongdoing. In that sense, Singapore might offer itself as a prime example of how an industry should be run, which many other jurisdictions would do well to emulate. The difficulty in that, of course, is that controls in a tight-knit community within an island state are much more easily enforced.