ATLANTA — People have been gambling in convenience stores "since day one," Brian Wente said.
Video gaming is just the electronic version of the lottery, said Wente, vice president of retail operations and marketing for Vernon Hills, Ill.-based Graham Enterprise Inc.
What was once a back-room industry is now legal in nine states (Oregon, Nevada, Montana, South Dakota, Illinois, Louisiana, West Virginia, Pennsylvania and Georgia), and the customers who frequent c-stores are the same ones who will use video gaming terminals, Wente said.
Robert Perkins, vice president of marketing for Rutter’s; Derek Harmer, general counsel and chief compliance officer for Accel Entertainment; and Wente spoke Oct. 1 at a session at the NACS Show in Atlanta.
Here are their tips for how to add gaming terminals to c-stores…
1. What equipment is needed
Video gaming equipment will look like what someone may see on a casino floor, Harmer said. A store will need video gaming terminals, a self-redemption terminal (which looks like an ATM) and equipment services. For the most part, the terminal operator would make sure a technician is available to service a machine if needed, Harmer said.
Depending on the state and company, some machine operators will fund the machines or gaming room construction so it comes at no cost to the c-store.
Those considering adding gaming machines will also need the space to do so. The design of the room is critical for implementation, Perkins said. Spacing, lighting, whether there needs to be a waiting area and proximity to the register area for monitoring are all things to consider.
Wente suggested looking at back-room space conversions.
2. The players
Those interested in adding terminals will have to go through a gaming board that regulates the industry. Regulation varies by state and sometimes municipality, Harmer said.
Other players are the terminal manufacturers, who make the machine hardware, and the central communication system operators, who connect licensed terminals to a central server. Terminal operators and establishment owners are the other key figures when it comes to gaming.
The search for a terminal operator took Rutter’s almost a year, Perkins said, and the company chose Marquee by Penn after meeting with many potential partners.
3. The payoff
Although Wente had no budget to begin implementing video gaming terminals, Graham Enterprise gave him the chance to put terminals in one store. After reviewing how well that went, the company decided to roll out the program further.
One store under the BP brand in Johnsburg, Ill., brought in $451,000 in net revenue in 2018, and it's expected to bring in $456,000 in 2019. At a Forest View, Ill., site, the total revenue over four years was $2.5 million, he said.
Rutter’s opened its first location with video gaming in August at a location in York County. The York, Pa.-based chain said it plans to have 10 locations with gambling by the end of this year, and 20 to 22 locations by the end of 2020.
While Perkins said it’s too early to talk numbers for his chain, so far projections have been positive.
4. How to get started
When considering whether to add video gaming, retailers should ask these two questions, Wente said: Did it just cannibalize other categories (in Wente’s experience, it doesn’t); and what are the additional expenses?
Retailers should also educate themselves on the terminal operators, the speakers said, and see what they’re willing to invest in a store's gaming area.
Also, know the legislation in the company's area of operations, and expect approval to take some time.