Until 30 June 1997, gaming machine tax was assessed on gaming machine turnover, which, when all gaming machines were set at an 85% return, bore a fixed relationship to player expenditure for a site or region. With gaming machine turnover no longer an accurate measure of machine gaming activity, OLGR now classifies machine gaming activity by metered win in its published statistics.

As gaming machine tax has been assessed on metered win since 1 July 1997, metered win has been used in the machine gaming industry as a measure of machine gaming activity for a considerable period of time.

Monthly taxable metered win for a period is the metered win for the period, less, if applicable, any amounts for jackpot contributions paid to a licensed monitoring operator's trust account for multiple site jackpots.

The following explanation shows how metered win represents:

• gross receipts after player wins, before payment of gaming machine taxes, fees and other operational costs
• player expenditure.

Metered win is defined in the Gaming Machine Act 1991 as:

"metered win for licensed premises for an assessment period, means the amount obtained by subtracting the metered payouts for the premises from the metered turnover for the premises."

The diagrams below, illustrate how metered win equals player expenditure.

The ratio of player expenditure to turnover is unique for any allowable percentage return rate;

1 : 6.67 for an 85% return and

1 : 12.5 for a 92% return.

The diagrams below show that the amount of turnover stated is derived from player expenditure at the ratio for the particular percentage return rate, while the amount of metered win is what remains after the payment of prizes at the particular percentage return rate - the generating player expenditure being equal to the resulting metered win.

Essentially, the $10 player expenditure becomes the gaming machine licensee's $10 metered win.

While for a particular percentage return, a precise ratio of player expenditure to turnover exists, for a whole site or region, the resulting ratio depends on the aggregate of machines of different percentage return rates for the particular configuration.

Consequently, for gaming machines providing returns of between 85% and 92% approximately, gaming machine turnover is not a practical indicator of metered win or player expenditure.

The examples below apply the stated return rate (which is the average return applicable for considerable play, e.g. 100,000 games or more) to a small amount of play for illustrative purposes.

This document is available for download Metered Win (PDF 195 K)

The meaning of the word turnover as used by the machine gaming industry is very different to its regular meaning as used, for example, by the retail industry. Consequently, misleading statements are frequently made by those not familiar with the word's usage in the machine gaming industry when referring to published statistics.

In the following illustration, turnover has a similar meaning to its machine gaming industry usage.

A mother enters a local store with her son. On noticing that the store has a pinball machine that costs $1 a game, she gives her son $1 to play pinball while she attends to her shopping. The boy, on leaving the store, tells his mother that the machine gave him two extra games as a result of the game for which he paid the $1.

The boy played three games - and it cost his mother just $1. Three games, however, are worth $3 - that is, the machine had a turnover of $3 - but it only cost the boy's mother $1. Furthermore, the pinball machine only took $1, although the machine registered three games (i.e. turnover expressed as number of games) having been played.

There is only $1 for the storekeeper and the owner of the machine who placed it in the store to share. The $3 exists only as a financial measure of games played (i.e. turnover expressed as a $ value).

How reasonable would it be now for the boy's grandmother to say to his mother, "For the $3 spent on playing the pinball machine, you could have bought your son the $2.95 coloured pencil set he's been wanting?" Obviously not very reasonable - but unfortunately, that kind of reporting is all too frequent.

We might read or hear a news item (based on published machine gaming turnover statistics) such as, "For Happy Vale Shire, $80 million was lost through poker machines, enough to build that new hospital wing the district so badly needs". A case of buying the $2.95 coloured pencil set with $1 revisited, isn't it?

Back to the local store illustration again. When the current storekeeper bought the business, it didn't have its pinball machine and the store's turnover was given as being $800 a day. That meant that, on average, $800 worth of products were sold each day and the storekeeper, at the close of business for the day, would have $800 more in the cash register than at the beginning of the day. This is the regular meaning of the word turnover. (The storekeeper's operating profit would be $800 less the wholesale cost of the products sold less the cost of operating the store for the day.)

With the pinball machine, turnover was $3, but the storekeeper was only $1 ahead. Out of the $1, the operator who sited the machine gets a percentage (comparable to the wholesale cost of products sold). The storekeeper's operating profit would then be obtainable by subtracting the cost of operating the pinball machine from what remained of the $1 after the operator who sited the pinball machine took his percentage. The pinball machine's $1 take is essentially the machine's trading turnover, just as metered win for gaming machines is essentially a site's trading turnover.

Queensland's gaming machines, however, generate approximately $6.65 of turnover for every $1 of gross revenue
compared with, in the pinball machine illustration, $3 turnover for $1.

Queensland's machine gaming performance, depicted, as for the pinball machine illustration would appear thus:

The relationship between patron wager and turnover for Queensland's gaming machines, set to average an 85% return to patrons, can be theoretically envisaged thus:

This document is available for download Turnover (PDF 15 K)