Five things to know about running an amusement arcade business
Amusement arcades would appear on the surface to simply revolve around the premise of coins go in, coins come out, but there are a number of things that all amusement arcade owners should be aware of…
1.What type of arcade you’re running
Not all arcades are the same, and it’s important to know how yours is classified so you can obtain the correct license. As specified by the Gambling Commission, there are three different types of amusement arcade. These are:
- Licensed family entertainment centres (FECs)
- Unlicensed family entertainment centres
- Adult gaming centres (AGCs)
A licensed family entertainment centre contains category C and D machines (more on this below), and adults and children are permitted to game. To run a licensed family entertainment centre you will need to acquire a general operating license from the Gambling Commission, and a premises license from your local licensing authority.
An unlicensed family entertainment centre is only permitted to offer category D games machines to customers. They are required to obtain a gaming machine permit.
Adult gaming centres are permitted to have category B, C, and D gaming machines, and for this they must have a gaming machines general operating license (AGC), issued by the Gambling Commission, and a premises license from the local licensing authority.
2.The number and types of machines you’re operating
They types of gaming machines are defined as follows:
Category B – These machines are allowed to have maximum prizes of between £400 and £10,000, and maximum stakes of between £1-100. Adult gaming centres whose license was granted before 13 July 2011 are permitted at most four category B machines or the equivalent of 20% of their total machines, whichever is greater. Those with licenses granted after this date can have no greater than 20% of their machines as category B machines.
Category C – These machines can be used by licensed family entertainment centres, and are permitted to have a maximum prize of £100 and a maximum stake of £1.
Category D – These can be used in all gaming centres, and can have a maximum money prize of £5 or a maximum of non-money prize of £8, except on a ‘crane grab machine’, where the non-money prize can be as much as £50.
Category B and C machines have a minimum age of 18 to play, while category D machines have no age limits. You can find more detailed machine classifications on the Gambling Commission website.
3.How much maintenance will cost
Machines have to be maintained and repaired regularly, and for this you will need a licensed maintenance technician. You should ensure that you factor these costs into your budget.
4.What level of protection your arcade has
When running an arcade business you need to protect both your premises and your machines. Having adequate amusement arcade insurance is essential, and there are a number of factors that you need to protect against. Customers themselves can damage machines by accident or on purpose while with so many electrics around, fire is a risk, so your insurance should cover these and the considerable risk of theft.
Be sure to keep your insurance policy up to date, particularly when buying new machines, to ensure that you are covered for the full value of your premises and its contents.
5.What compliance and enforcement checks your business is subject to
The Gambling Commission is the body which carries out periodic reviews, administers guidance and imposes additional license conditions when necessary.
If you’d like to find out more about amusement arcade insurance, get in touch with Park Insurance.