Industry profile: Derek Petrie President of BACTA
Derek Petrie President of BACTA has already been in his amusement arcade since 8am fixing a leaking roof with a builder when I call him, “There is always something to be seen to,” he tells me.
How Derek manages to cram in his duties as BACTA President with running a 5000 square foot FEC with internal AGC in Somerset, one can only imagine. Only last week as we firmed up our interview he was off to London for National Council, EAG and Charitable trust meetings and the week before he had been working flat out in his arcade throughout Jubilee weekend.
Derek came to the amusement industry around 25 years ago after having run a company manufacturing flexible packaging. I asked him about what had attracted him to join the industry. “I was fed up with London and I was looking for a change,” he says. “I was a sleeping partner in a venture which involved building a new arcade and an adjacent business came up for sale and I bought it.”
“The industry has changed in just about every way possible since I joined,” he adds. “There has been a lot of technical innovation which has resulted in new and more reliable equipment. The rise in redemption has been a big change. In our location, redemption has almost taken the place of video – now about 25 per cent of our machines are redemption and we don’t have any video any more.
Derek’s FEC is very family orientated. “We have the AGC for the grandmothers who come with the kids. They want to play their prize bingo, while the kids play,” says Derek.
One thing that hasn’t changed for the better since Derek joined the industry is the amount of regulation covering the industry. “We pay ten times more than we used to for a gold-plated regulator to do what we always managed to do ourselves,” he complains. “All that this has done is to increase the administrative burden.”
Derek’s biggest challenges as President of BACTA he says are MGD and the Triennial Review. “It is essential to get the Triennial through quickly so that the industry can sell machines at EAG in January,” he says.
As for Machine Games Duty, Derek is clear. “We are trying desperately to fight MGD as it is going to tip some arcades over the edge,” he says. “Of course it will suit some but not a lot and it will certainly close some arcades. For the Treasury to claim that MGD is revenue neutral, they clearly have flawed research.”
Derek points out that the administrative burden of MGD is also going to pose a heavy burden for arcade operators. “Take an FEC like mine,” he says. “We will have two levels of MGD – one at 20% and the other at 5% and then we have the other machines like cranes, redemption and novelties which carry on as before. That’s three different tax levels – three sets of tax returns. And the VAT situation is just the final straw – it adds 20% on the cost of machines overnight.”
Derek attributes the start of the decline in the size of the industry to the 2005 Gambling Act but he remains optimistic about our future. “There will always be opportunities in an industry as inventive as ours,” he says.
When talking about the work carried out by BACTA, Derek becomes more bullish, clearly proud of the role the association plays in defending the rights of the industry.
“We have an ongoing and intense relationship with Government,” he says. “We have moved from periodic formal presentations to a running dialogue with senior figures. They rely on us for our unique perspective as we represent the full range of businesses from small to large. No other trade bodies are able to do what BACTA does – they are either riddled with internal conflict or so broadly based that they lack focus. BACTA is much more than simply the leisure industry – we are the amusement machine industry and proud to be so.”
“Our needs are very specific to our industry,” he continues. “We have to speak in one voice to make it clear how the industry is suffering. We have to be consistent with our media profile to avoid being a political football. And to do this we need to work closely as an industry to provide evidence to Government. Social responsibility has to be a key factor in our lobbying.”
Derek believes that the Government does largely understand the position of the industry . “The Government needs to protect jobs while demonstrating social responsibility but it sees our industry as deserving of parliamentary time,” he says. “The problem is that the Government has a lot of other pressing issues to deal with. We need to ensure that we give Government a clear message – and that this message does not get lost in a vague broader lobby. This is essential – the only way to take the industry forward is to provide a clear and consistent message to Government,” he stresses.
It is clear that the establishment of other trade bodies claiming to speak for the industry is a source of frustration for Derek, who feels it undermines the work done by BACTA. My final question is designed to lighten the tone. “What do you do to switch off from business?”
“My lady and I share a lot of interests, tennis, cricket, the theatre, and good wine,” says Derek. “The only problem is finding the ‘off’ switch!”
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