A new report issued in November estimates the global count of gaming machines at 7,132,162 - give or take another ½ million for illegal machines operating in the likes of China, Ecuador, and Zambia.
More importantly, Australia boasts a minor 2.4% worldwide market share, conflicting with other estimates ranging from 10% to a whopping 21%.
The Australian Gaming Machine Manufacturers Association commissioned an independently audited report outlining the number of gaming machines installed on a global basis. The detailed results, backed by sources of reference, are somewhat surprising.
The largest number of gaming machines are found in Japan with 4,690,708 machines which equates to one machine for every 23 people over 15 years of age. The table below shows the top ten countries in terms of the total number of any type of gaming machine.

COUNTRY Number of Machines
Japan 4690708
USA 582605
Italy 351400
United Kingdom 250000
Spain 228877
Germany 220593
Australia 172764
South Africa 64974
Canada 53877
France 53250

New South Wales, together with a small amount of machines in ACT, still leads the pack with almost 95,000 gaming machines - more than 60,000 above the state of Victoria. Western Australia is yet to legalise poker machines outside the Burswood casino, hence the reduced number.

STATE Total SOURCE
New South Wales/ ACT 94426 NSW Department Of Gaming And Racing
Victoria 29789 Victorian Gaming Authority
Queensland 30,347 Office of Gaming Regulations Annual Report
Western Australia 1181 Burswood Casino
South Australia 12794 Liquor and Gaming Commission
Tasmania 2373 Tasmanian Gaming Corporation Annual Report
Northern Territory 1219 Northern Territory Racing And Gaming Authority

In terms of overall global penetration, the Asia-Pacific region has the largest installed base of gaming machines, reaching in the vicinity of 5 million. It's important to note, however, that the counts do not include cruise ship operations or machines in jurisdictions where gambling is deemed to be illegal. International gaming machine sales managers would therefore probably add a decent 10% to the total count and include slots in the likes of China, Cambodia, Vietnam, Caribbean, Egypt and Madagascar.

REGION Number of Machines Percentage of Total
Asia Pacific 4890736 68.6%
North America 636482 8.9%
South America 50950 0.7%
Europe 1478970 20.7%
Africa 75024 1.1%
Total 7132162 100%

Note: Gaming machines are defined as "any machine that is used for gaming purposes (whether mechanical or electronic) and offers the user a potential return on a single ‘game' that is greater than the amount risked on that game." Included are steppers, videos, VLT's, pachinko and AWP's offering monetary payouts.

Parliament Watch - how it affects your Club

1. Cost Relief for Small clubs

The RCA and Government agree that smaller clubs should not suffer an unfair disadvantage to their profitability with the TAB monitoring system.
The Central Monitoring fee that clubs will have to pay when the system is implemented is $26.10 per machine per month (Annual : $313.20).
The Government has decided to pay the fee for smaller clubs.

On 19 October, the Minister for Gaming and Racing announced in Parliament that:

"About 500 small clubs in the State are not wealthy and make a profit of only as much as $200,000 a year. The Government recognised the position of those clubs in the last taxation review, when it decided that clubs that made a profit of up to $100,000 a year would pay no tax, and that those with profits of between $100,000 and $200,000 would pay only 1 per cent tax. Last week at the annual conference and annual general meeting of the Registered Clubs Association in the Tweed, the Government and I recognised the position of those small clubs. It was obvious that clubs that make such small profits would be in financial trouble if they had to pay $26.10 a month for each poker machine. In fact, most of them, especially those in small country areas, would have had to close their doors."

"Therefore, the Government has decided that for the next four years 500 clubs will not pay that fee. After that time clubs with a profit of up to $100,000 will continue for all time to be exempt while those with a profit of up to $200,000 will pay one-third of the fee in the first year. Two-thirds in the next year and the full fee in the third year. In other words, they will be given relief for seven years."

Profit Range $ Clubs Machines Annual Monitoring Fee
0 - 100,000 336 2898 907,654
100,000 - 200K 177 2395 750,114
TOTALS 532 5656 1,657,768
Based on figures for 1998 issued by Department of Gaming & Racing

2. GST - the next challenge

Poker machine profits will be subject to the new Goods and Services Tax next year. This will seriously affect around 640 small NSW clubs. If the tax is applied in the same way as it does in New Zealand where GST has been long established, the following outcome will apply to smaller clubs:

Profit range $ Clubs Annual Profit $ Current Tax $ GST Tax $ Difference (loss) $
0 to 25,000 107 1,150,206 0 104,564 104,564
25 to 100,000 229 14,370,761 2,663 1,306433 1,303770
100 to 200,000 177 25,428,334 136,052 2,311,667 2,175,615
200 to 300,000 128 31,234,216 1,437,733 2,839,474 1,401,741
TOTALS 641 72,183,517 1,576,448 6,562,138 4,985,690

The NSW Treasurer, Mr Michael Egan, recently stated in Parliament that all Australian States "...have given a guarantee to the Commonwealth Government and the gaming industry that there will not be double taxation."

The arrangement with the GST is that the Commonwealth will give the States whatever GST it collects and the States will reduce tax to ensure a neutral impact.

For the 641 small clubs, the State Government collects less than the GST levy - and therefore will not be in a position to make a neutral adjustment. Whether this situation will come under the umbrella of "double taxation" is a $5 million dollar question for the 45% of NSW clubs likely to be adversely impacted by the new tax.