Excerpt: Coin Operated Machine Taxes - FAQ What is a General Business License? A General Business License is a license issued by the Comptroller that allows the license holder to engage in the business of manufacturing, owning, buying, selling, renting, leasing, trading, repairing, maintaining, servicing, transporting, exhibiting, or storing coin-operated amusement machines in Texas. The annual fee for a license is $200, $400, or $500, depending on the number of machines you own.
What is a Registration Certificate? A registration certificate is a certificate that can be obtained by a person who owns and operates amusement machines only in his or her own place of business; owns no machine subject to the occupation tax imposed by this chapter located on the business premises of another person; and has no financial interest, direct or indirect, in the coin-operated music, skill, or pleasure machines industry, except for the interest he owns in his machines. The annual fee is $150. What is the occupation tax? The occupation tax is an annual tax of $60 that is levied on each coin-operated amusement machine that is exhibited or displayed in Texas. Payment of the tax is evidenced by an occupation tax permit (decal) that is affixed to each machine. The tax may be prorated quarterly for machines placed in service during the year.
Source: http://www.window.state.tx.us/taxinfo/coin/faqcoin.html
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Excerpt: Coin-operated amusement devices can be found in a variety of locations. Primary locales include taverns and bars, restaurants, retail stores, and shopping malls, which often include one or more video arcade establishments. Other locales include bus terminals, hotels, grocery stores, and truck stops. The largest establishments making use of the devices are arcades, family entertainment centers (FECs), casual dining facilities with large game rooms, and gambling operations, including casinos and horse racing tracks in states that allow them to have slot machines as a means for competing with casinos. The modern-day FEC began to emerge in the 1980s and differed from past entertainment areas that featured coin-operated amusement arcades, which were commonly found in theme and amusement parks or in vacation or downtown areas and relied on tourism. The modern FEC is usually a large indoor facility set in a residential area and offers multiple attractions, including play areas, miniature golf or bowling, and sections with coin- and/or token-operated games. The development in the 1970s of soft, contained play equipment, safe for children to bump against, helped spawn the modern FEC, allowing developers to combine large and adventurous play and gaming areas. Many FECs depend on coin- and/or token-operated games. Per capita expenditures are less than $15 per visit, so FECs rely on repeat visits and a steady flow of new customers. Token-oriented games account for 25 percent of the income of these establishments. Sports 'n' Games Funplex, in East Hanover, New Jersey, and Enchanted Castle, in Lombard, Illinois, which date to the 1980s and the advent of the FEC, are examples. Sports 'n' Games Funplex is a 100,000-square-foot indoor family entertainment center, open year round, hosting over 500,000 guests annually. Enchanted Castle features go-karts, laser tag, miniature golf, bumper kars, a playland, and arcades with hundreds of games. Coin- and token-operated amusements are also significant at smaller venues, like Chuck E Cheese's, a chain of more than 500 pizza restaurant-game rooms, where food is the main source of revenue… More adult versions of entertainment centers feature casual dining, full bar service, and cavernous game rooms. Among the most popular are Dave and Buster's, based in Dallas, Texas, which has over 40 locations across the United States with $463 million in revenue in 2006, and Game Works, which includes a snack bar, grill, full-service bar, and massive gaming floors categorized into separate zones. Emphasizing technological entertainment, Game Works was formulated by chairman and co-founder Skip Paul in collaboration with Dreamworks SKG/Steven Spielberg, and Universal Studios. SEGA, the videogame pioneering company, acquired Game Works in 2005 and made it part of Sega Entertainment U.S.A., Inc. (SEUI). ESPN Zone, started by the cable sports network, has eight locations, each of which offer food and drinks, more than 150 monitors showing sporting events and feeds from the various ESPN channels, and more than 10,000 square feet of interactive games… Regulation of coin-operated amusement devices varies from state to state. Some are very strict regarding every aspect of the industry, including use and location of the machines. For instance, in the state of Texas, regulations determine the percentage operators may pay to the owner of the establishment in which their machine in located. Operators must also keep records of income from individual machines. By contrast, some other states regulate less strictly and allow operators wider parameters. Source: " SIC 7993 Coin-Operated Amusement Devices." Encyclopedia of American Industries. Gale, 2008. Business & Company Information Center. Gale Cengage Learning. University of Texas At San Antonio, John Peace Library. San Antonio, TX. 26 May 2009.
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Excerpt: Jack Boasberg has watched the American gaming industry evolve from the coiled springs and blinking lights of pinball machines to a home-based, high-tech industry, leery of the hulking arcade machines on which he built his fortune. Now, the 69-year-old New Orleans Novelty Co. owner has shuttered the doors of the last traditional arcade in the New Orleans area and is preparing to sell off what remains of his once vast gaming empire, marking the end of an era for local gamers. "The traditional arcades will go the same way that drive-ins went," Boasberg said. More than 1,000 of Boasberg's arcade machines could be found at fast food restaurants and convenience stores in Orleans and Jefferson parishes in the 1980s and early 1990s before the ubiquity of home gaming systems… In the 1980s, game makers would create arcade versions of games such as Pac Man, testing the waters with gamers before sinking money into the development of home systems, Boasberg said. Over time, that business model was reversed. "Now it's the other way around," he said. "Home games are made, computer games are made and maybe if they do real well, they'll make a version for the arcade."… When they make a new machine and it costs the arcade $20,000, people expect to pay a quarter to play it, not to mention they can play all the games on their console at home on their big screens and all, so they don't even want to go to the arcade anymore," Wagner said. "So I don't know what the future holds for arcades."
Source: http://findarticles.com/p/articles/mi_qn4200/is_20090119/ai_n31209448/?tag=content;col1
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Excerpt: Redemption Plus is harnessing the power of the Web to create a destination where patrons can redeem winnings for prizes rather than waiting at the prize counter. The company's novel Planet Prize allows FECs to offer merchandise they normally might not stock, including larger items, and eliminates the liability of housing high-value prizes. The application is now available to locations that use Embed's card system and could be adapted other debit systems, officials said. In action, a player registers his or her game card at the location, sets up a login name and password – and then plays as usual. At his time of choosing, the player logs into the Planet Prize store, accessible through a link at the FEC's website. Redemption Plus customizes each Planet Prize store to match the facility's site, keeping a consistent look and feel for the end customers. After the redemption customer shops online using his or her stored credits, selections are shipped by mail and are usually received in about 10 days. Shipping is included in the "ticket price" of the online items. Planet Prize helps FECs in areas other than inventory maintenance, officials are quick to point out. "By driving players to our customer's website, they are able to feature online promotions and begin loyalty-marketing campaigns to help increase repeat business," said Redemption Plus president Ron Hill…
Source: http://www.vendingtimes.com/ME2/dirmod.asp?
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Excerpt: With fun industry revenues drastically affected by the economy and weather, the importance of income from coin-op redemption and skill games, and video games, has never been more vital to FECs. "About 77% of FECs have redemption skill games and 84% have coin-op skill games," said Carole Sjolander, executive director of the International Assn. for the Leisure and Entertainment Industry (IALEI)… McAuliffe, who was with Edison Bros. Entertainment operating redemption and crane games before launching Pinnacle Group in 1996, emphasized that "every owner or operator has to look at game ownership or revenue sharing from a total retail perspective, and apply three key principles." The decision depends, in part, on the "experience level." The coin-op segment has to be managed as its own business with an experienced staff. Ownership is capital intensive with a need for frequent "refreshment" of the hottest new game, which typically cost from $4,000 to $15,000, and a corollary need for contacts to sell off older games… Among advantages to an operator using a game vendor and sharing revenue, he said the vendor, as the "game expert," keeps up with the latest high-earning games and player trends. They purchase the games that must justify a payback on a 50% revenue share basis. They also supply the technician and preventive maintenance schedule, with a key point being response time for any game repair. As for game ownership, advantages include more control, but this is a long-term commitment with a significant capital investment and patience for a one- to two-year ROI, offset by getting all revenue. An onsite game tech on the payroll is necessary to control repair response time, down time and appearance of all games…
Source: http://www.allbusiness.com/services/amusement-recreation-services/4582478-1.html
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Excerpt: Penny Arcades had been around for years before the advent of electronic video games. Many are still around today but mostly in specialized areas like the NJ shore and other vacation hot spots. Gone is the day of the neighborhood arcade. The neighborhood arcade came about when the electronic games hit the market. They were specialized vending machines and only a small business owner could afford one. They often replaced the lone pinball machine at many small businesses. Video game machines drew large crowds of kids and teenagers. It wasn't until the advent of the home gaming system that the business for the local arcades started to decline… At their height arcades saw the players of the home systems and those who could not afford such systems. The arcade games were made especially for the arcade and had the proper controls to complete the illusion that you were: Driving or piloting a submarine or aircraft. While the home system was often confined to a joystick and then later game pad. Since then you can now buy a steering wheel and pedal for your favorite Nascar game even a joystick that looks like and performs like the yoke of a plane… Arcades aren't completely out of business yet but it's been a long time since a video game was seen in the corner of every small business. Although from what I understand video poker machines especially those that pay out are taking their place. I think it depends upon what part of the country you live in.
Source: http://www.helium.com/items/895027-the-history-and-decline-of-the-arcade-games
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American Amusement Machine Association http://www.coin-op.org/
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International Association for the Leisure and Entertainment Industry http://www.ialei.org/ContentPage.aspx?WebPageId=3707&GroupId=1014
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