The vending industry between regulation and economic trends since 1993 – update 2023

The vending industry is currently facing a variety of challenges. Rising operating costs, the decline in floor space in the hospitality industry, growing energy costs and inflation, the COVID-19 pandemic as well as increasing digital competition are putting providers of slot machines under increasing pressure. At the same time, there is only limited legal room for manoeuvre for the vending machine industry to counteract the changed economic conditions by adjusting prices, the quantity offered and via changes to product characteristics.

On behalf of the Verband der Deutschen Automatenindustrie e.V. (Association of the German Amusement Machine Industry), DIW Econ conducted a study in 2022 examining the key economic figures of the amusement machine industry against the background of the applicable regulations and the development of economic trends over the past 30 years. This report has now been updated in light of the inflation dynamics and the long-term impact of the pandemic, amongst others, of the past year.

As in the original report, the analysis indicates a close correlation between the applicable legal framework and the key figures in the gaming industry. The vending industry is thus becoming a pawn in a game of legal regulations.

At the same time, long-term economic trends, such as rising operating costs and the exodus of pubs, as well as current developments, like the expansion of digital offerings, the aftermath of the COVID-19 pandemic, and recently high level of inflation are putting the industry under increasing pressure. Given the regulatory environment, vending machine operators cannot adjust prices, volume offered, or product features to adequately address these challenges. As a result, gaming attractiveness at slot machines may decrease.

If the reduced attractiveness of gaming leads to an exodus of consumers, it must be expected that at least some players will replace gaming machines with alternative offers, for example, illegal offers. However, regular evaluation of regulation with respect to changing economic conditions could counteract this.

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