Slot Sales Down, VLT’s Prosper in Canada
Eilers and Krejcik, a boutique research firm focused on servicing the gaming equipment, sports and interactive gaming sectors within the global gaming industry has released a report which shows total U.S. and Canadian slot machine sales decreased dramatically in the second quarter of 2019.
Based on reported figures and the company’s own proprietary research, it is estimated that total US and Canada slot machine sales decreased by 5.6 percent year-on-year. A total of 19,475 slot games were sold in North America during the second quarter of the current year. The decline in sales was driven by significantly lower number of ‘expansionary sales’ which offset traditional ‘healthy sales’ which is where dated machines are replaced.
Video Lottery Terminals (VLT) on the Rise
In fact just 2,000 of the total slot sales during the period were allocated to expand or develop a brick and mortar business but the research firm noted the current quarter included 400 Canada/Oregon VLT (Video Lottery Terminal) replacement sales.
New Brunswick was the first Canadian province to introduce VLTs. They were introduced in the early 1990s and, as of 2005, all provinces except British Columbia and Ontario, permit VLTs due to the massive revenues they generate.
Ontario has recently passed legislation that could allow VLTs in the near future and given the province accounts for over 40 percent of all gambling revenue generated in Canada, their popularity could have huge financial ramifications.
But the prevalence of VLTs in Canadian gambling industry has prompted criticism both domestically and abroad. Some critics argue that the massive social costs brought on by VLTs actually cause the provinces to lose a greater sum than is generated by the terminals.
VLT’s are similar to a conventional slot machine by being a stand-alone device containing a random-number generator but, controversially, each terminal is connected to a centralized computer system which allows the lottery jurisdiction to monitor game play and collect its share of revenue.
The terminals are very controversial. In fact it was announced in late May the Supreme Court will make a decision on whether a ground-breaking court case against VLTs can proceed. A class action introduced against VLTs says that they’re inherently deceptive, addictive and illegal under the Criminal Code.
Current research suggests the average land-based casino spend of a Canadian customer on slots is $55 and, unlike U.S. casinos – where slot takings outweighs all other games – Canadians do not favour slots ahead of table games such as roulette and blackjack.