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December 2013

Frank SeninskyFrank Talk

Don't Give Up on Tickets Just Yet

The FEC industry is abuzz with the relatively novel notion of going ticketless for redemption games operated by a debit card system. But going ticketless presents a downside, and a number of our clients that have insisted on going ticketless have taken a hit to their business whether they are fully aware of it or not. In looking at game earnings for last year, the number one return on investment came from our ticket cranes; they literally produced an over 1,000 percent return on investment [Big Bass Wheel was a close second].

Tickets provide significant value for FECs in at least four main ways: the dramatic appeal of a big ticket win, maximized game earnings from certain categories of games, tickets as prize promotions, and certain regulatory benefits connected with giving out tickets as prizes.

Dramatic Appeal

Winning a jackpot or a big-ticket bonanza represents one of the best marketing and promotion concepts our industry has to offer. To see the smile on a child’s face as he/she goes about collecting their ticket wins still provides me with a thrill and great feeling even after 50 years of witnessing these events. The legalized gambling industry spent decades perfecting the right jackpot sounds to trumpet a winner on the casino floor. In recent years casinos have gotten away from dispensing coins but they cater to only the adult market. But I’m still a believer in the power of the big win to spur others on to play more games.

In the redemption game context, going ticketless means you lose that moment of truth when the tickets start streaming out of the dispenser. You still get bells and whistles, but not the tangible vision of that winner walking around with their massive pile of ticket winnings. Someday, maybe, we will have virtual tickets, like something out of the Jetsons that fly around the room and then morph with great fanfare directly onto your debit card as you hold it up for all to see!

Quick Coin Games and Pushers

When a player coins up a pusher and sets their token loose, they wait for a few seconds in anticipation to see if one or more tokens fall over the edge. Or, when it comes to quick coin games, they excitedly aim their coin at a particular ticket value target and let it go or launch it. Again each try takes only a few seconds. In a ticketless game, when they achieve their goal, nothing happens, at least nothing tangible. This is not a lot of fun and the player gets easily bored. Extra points are merely credited and received when the player chooses to have the points transferred to their card. Ticket payoff is the main entertainment value or attraction, the drama so to speak, that pushers and quick coin games offer.

In ticketless locations, we are seeing younger children, after they play a redemption game, run directly over to the ticket station to see how many more points they now have on their card. They want to immediately validate their winnings, following each play of the game. You can see them running back and forth across the game zone floor.

A lot of FECs who have gone ticketless don’t realize they have lost this main category of revenue, and, in fact, ticketless locations are trending away from that category of games. These are great earning games, but they risk being forgotten in a ticketless environment. For the past 45 years (as long as I have been in this industry) pushers and quick coin games have always been our #1 earning game category.

Tickets as Prizes & Promotions

Over the last 10 years we and many other operators have put a lot of time into finding ways of using tickets as prizes in cranes and merchandisers. We started with Stackers, and quickly discovered that strips of tickets worked really well as a minor prize. It really added another dimension to the game and held up earnings for the games. We’ve done the same thing for cranes and all of the other merchandise games including using bricks of tickets, bar coded coupons for hundreds and even thousands of points, and even debit cards with a stored number of tickets. The players seem to love it in locations that have a prize redemption center.

People love to collect tickets, and it’s a lot more fun to collect tickets than virtual points. Going ticketless can be a form of laziness. You may achieve efficiency and cost savings in terms of not buying tickets, having to load the tickets avoiding ticket jams, and having to count and shred the tickets, but you are foregoing a significant promotional opportunity.

We also use tickets as a way of increasing the perceived value for birthday parties, either by giving each person in the package a certain amount of tickets or by giving the birthday child, for example, 1,000 tickets. In some cases the tickets are used as a prop during the party such as wrapping the birthday child in the tickets and singing Happy Birthday.

We were curious how the birthday child used the tickets: about 30% share the tickets. But many of them don’t share. This actually creates an incentive on the part of the other party children to stay after the party and play for more tickets or start their campaign to have their birthday party at the FEC so they can get that same ticket jackpot.

Regulation and Taxes

A recent Texas Supreme Court case declared that crane prizes are exempt from sales tax which is a big savings. This could in turn mean that redemption prizes are also likewise exempt from sales tax because you can use tickets in a crane as a prize.

An increasing number of states have enacted prize limitations, and we have to figure out the best way to operate in these states. If there’s a $10 prize limit (as in Ohio), you can use a whole brick of 2000 tickets as a prize and still be at the prize cap. You just set your ticket value as half a penny for that color of ticket, and then you can give away 2,000 tickets. Maybe you offer specially colored tickets so you have multiple valued prize tickets. Tickets make it easy to be more creative. You’ve got to learn how to operate inside of these new restrictions.

Operator’s Choice

Most of the accounts where I revenue share agree with me that we should use tickets because they buy into my arguments. But we have given our locations the ability to offer their patrons the choice of whether to use tickets or not. We do this by programming the location’s debit card system so when patrons buy their cards they can opt to receive tickets or be ticketless. We only give them a short window of time of 20 seconds, and so the default setting is important. We have tested many different configurations. I still conclude that tickets should be the default for the vast majority of family entertainment centers, especially those that cater to younger patrons. The vast majority of locations don’t even have a debit card system so they don’t even have the option of going ticketless.

As if to prove this theory, one of our consulting locations ran out of tickets on a Friday evening so they set everything up to go ticketless where patrons previously had a choice. For the heavy play weekend, every customer had to go ticketless and the staff made a great effort to explain how ticketless works. When they got their ticket order in and went back to providing the option of tickets or ticketless, 85% of the customers opted to use tickets.

We’ve had four or five consulting locations decide to go ticketless upon opening and they have surely lost out on the marketing aspect of the tickets. They do not have any way of measuring if they have lost out on quick coin and pusher games revenue. I’m not going to argue with those who are determined to be ticketless, but I still find a lot of value in using tickets both as a marketing tool and as a location currency that has a high perceived value to the customers.

Maybe a future generation of children will be more adapted to a ticketless world, but for now for me tickets are still powerful symbols of success.




Frank Seninsky is president of Alpha-Omega Group of companies, which includes a consulting agency, Amusement Entertainment Management (AEM), and a nationwide revenue sharing equipment provider, Alpha-BET Entertainment; all are headquartered in East Brunswick, New Jersey. Along with industry consultant Randy White, Seninsky also heads up Foundations Entertainment University. During his 41 years in coin-op, Seninsky has presented nearly 250 seminars and penned more than 1,000 articles. He has served as president of the Amusement and Music Operators Association from 1999-2000 and is a past chairman of the International Association for the Leisure & Entertainment Industry. Seninsky can be reached at 732/254-3773 or by email at fseninsky@aol.com and www.AEMLLC.com.

 



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