For 10 years (at least), this industry has lobbied for the new dollar coin. Now that it's here, many operators are wondering: what do I do now? I've read tens of articles on the dollar coin recently and they all tell me what a great deal it is, but I still don't understand what the primary benefit to me as an operator is, or what I should be doing about it.
In the course of my employment, I had an opportunity recently to meet with a couple of gentlemen from Double Eagle Market Development Company. Paul Griffith is President and Norman Broadhurst is CEO. This is the marketing company that has been retained by the U.S. Mint to roll out the new "Golden Dollar." The effort they are putting forth, plus the budget provided by the Mint, are impressive. The Golden Dollar marketing plan is similar to a major new product rollout by Procter and Gamble (another Double Eagle client). A huge effort begins March 7 with TV commercials touting the Golden Dollar themed, "Changing the Face of Money." They don't include Tiger Woods or MJ, but they are running with great frequency.
The initial rollout to-date is 250 million Golden Dollar coins. This is four times the annual production the Susan B. Anthony dollar coin experienced during its run. The Mint has far exceeded expectations...primarily because the largest retailer in the nation, Wal-Mart, is leading the distribution of the coin. Many stores ran out in two days.
I found Double Eagle representatives very helpful. They are prepared to assist our industry any way they can. It appears that the mistakes of the Susan B. Anthony dollar coin of years ago have been identified. They are committed to not making those mistakes again. The attached order form can be submitted to Double Eagle and the labels are free of charge.
The music and games industry is more challenged than the vending industry. Late-model vending machines use an electronic coin mechanism, which is easily convertible to the Golden Dollar. The music and games industry is a hodgepodge of preparedness. Among our crane manufacturers, for example, only one has a simple dipswitch conversion to the Golden Dollar. Unfortunately our video game manufacturers have not exactly been been forward-thinking either. Some of them still have no official plan in place for their new machines to accommodate the new Golden Dollar.
The question is, should you run out and convert all of your machines to accept the Golden Dollar? Or, should you take a "wait and see" approach? The Mint is already claiming public acceptance and suggesting the wait and see period is over. Of course the biggest obstacle in all of this is that although we have a new Golden Dollar, we also have in circulation the dollar bill, and no timeline to remove it from circulation. Most operators will find it necessary for their games to accept both (the Golden Dollar and the dollar bill) until further notice. This is terribly unfortunate. You can thank your paper manufacturing lobby for this. If the new Golden Dollar goes the way of our last dollar coin, you can be assured that leaving the dollar bill in tandem circulation will be the primary cause of its demise.
Okay, so each game needs to accept both the new Golden Dollar as well as the dollar bill. Are there any exceptions that don't need to meet this requirement? Yes: large game rooms where a changer is available. To take an idea from the vending industry, you can stock the changer with Golden Dollars and put Golden Dollar acceptors on all of your games. There would be no need for DBA's on these games, which is a large cost to eliminate. Customers would exchange dollar bills for Golden Dollars at the change machine and use those in your machines. You still may find it necessary to have the games accept quarters as well.
The next opportunity is pricing. A new denomination is a great opportunity to change the pricing of your games. Can you set a video game or jukebox that only accepts Golden Dollars? Two plays for a dollar, or maybe one game per dollar? Think of the pool tables, which can now go to $1 per play without having to line up all those quarters just right. I think the customer understands that new technology has a cost. If you're ever going to change, now might be the time to test different options. A few operators have already made this change successfully. Revenues have increased.
The majority of locations in our industry don't have changers. I suggest that machines in typical street locations will need to take a quarter, a Golden Dollar, and a dollar bill. If your game has two quarter chutes (as do most video games), then one will be converted to the Golden Dollar. Most games drop these two chutes into the same cash pan - which will make collection procedures interesting, unless we can find a way to separate the coins as they go in. For games with one coin chute, it will be necessary to replace the coin door. This can be done for roughly the cost of installing a DBA on a game, or $300 to $400.
There is good news in coin counting. The Mint at the last minute was able to make changes in the electromagnetic properties in the Golden Dollar identical to those found in the 1978 Susan B. Anthony coin. This means, among other things, that coin counters that count the SBA will also work with the new Golden Dollar. I don't think that by changing your machines to accept the Golden Dollar that you're going to experience any windfall profits initially. This is a long-term transition. The goal is to eliminate the dollar bill acceptors in total. This isn't going to happen anytime soon for the majority of our industry. The exception (and the opportunity) comes about if you can factor in an increase in your pricing structure. Regardless, the Golden Dollar is a change we all need to make, and the sooner the better.
The Mint and Double Eagle will both have representatives at the ASI and Western NAMA shows in Las Vegas in March. It would behoove you to visit with them, as they are more than willing to listen to any ideas that would further public acceptance of the new Golden Dollar.
My thanks to industry leaders Jim Stansfield and Don Hesch for giving
me their insight into this topic, as well as the Manager of our Sugarloaf
Technical Services Department in Boulder.