Argentina has a population of around 40 million inhabitants. Tourism is one of Argentina’s main industries and there is constant need to both increase and modernize it. The casinos in Argentina have taken a different dimension, and are now “multi-event” facilities. The days when people visited casinos just to gamble are long gone, today people do not only visit casinos to gamble, but to see musical shows, art displays or enjoy a meal.
The Argentine market for entertainment equipment is one of the world’s fastest growing markets, due to the constant increase of the demand for all kinds of entertainment activities in Argentina during the last 10 years. The entertainment business is very much interconnected with the population’s incomes and buying power, and thus major investments have come into the industry in the last three years as the Argentine economy started to demonstrate sustainable growth trends. For the purposes of this report under the term entertainment equipment we mostly include gambling equipment, equipment for casinos, their spare parts, components and accessories.
By the end of 2012, the Argentine market for entertainment equipment is expected to reach around $200 million. Foreign-made entertainment equipment is well represented in the market and it accounts for nearly 85% of the total Argentine market. Local distributors of entertainment equipment, which are mostly based in Buenos Aires, supply more than 80% of equipment imported into Argentina.
A. Market Highlights and Best Prospects
With the Argentine economy demonstrating sustainable growth trends over the years, the entertainment industry in Argentina is developing rapidly. The population's buying power is steadily increasing, and so does the demand for various entertainment activities. Thus, in Argentina, for the last few years, a number of new entertainment centers have appeared, such as gaming centers, casinos, bowling and billiard centers, amusement parks and attractions, etc., which increases the demand for all kinds of equipment and accessories for the entertainment industry, including slot machines, amusement, fast food, and park equipment; casino, billiard, and bowling equipment and accessories; spare parts and accessories for gambling equipment, light and sound equipment for show business, security and control systems for entertainment centers, as well as consulting and engineering services for the entertainment industry.
Of all the variety of entertainment activities in Argentina, gaming is the one experiencing the highest growth pace. The first Argentine boom in the gaming industry is associated with the mid 1990's, when a number of casinos and gaming centers opened in major Argentine cities. Currently, Argentina's gaming industry is experiencing its second boom related to the rapid development of the gambling machine sub-sector.
About 65% of all the gaming machines registered in Argentina are concentrated in Buenos Aires. In Buenos Aires, there are about 35,000 gaming machines, and, according to the estimates of the experts of the Argentine Association for Gaming Business Development, about half a million people in Buenos Aires regularly play gaming machines. Other estimates, however, indicate that there may be almost 2 million players in Buenos Aires.
Unlike the Unites States, where wheel slots are the most popular type of gaming machines, Argentine prefer video slots, which constitute up to 80% of all the gambling machines operating in Argentina. Regular players also like video poker machines; and, currently, electronic roulette is becoming more and more popular
Up to 85% of entertainment equipment is imported into Argentina. The market is very attractive for foreign manufacturers of gambling equipment because of its large sales volumes and dynamic growth. It is not yet saturated and has the fastest pace of growth compared to other markets.
The following HS groups are the best prospects for the Argentine market:
9504 - Articles for Arcade, Table or Parlor Games, Parts
9504300010 - Video Games, Coin or Token-Operated
9504300050 - Other Games, Coin or Token-Operated, other than Bowling Alley Equipment, Nesoi
9504300060 - Parts and Accessories for Games, Coin or Token-Operated
9504904000 - Games Machines, other than Coin or Token-Operated, Parts and Accessories thereof
9504909080 - Articles for Arcade, Table or Parlor Games Including Pinball Machines, Bagatelle, Billiards and Special Tables for Casino Games, Nesoi
B. Competitive Analysis
According to available estimates, local production accounts for about 15% of the total sales of entertainment equipment in Argentina. Private, local entertainment equipment manufacturing companies appeared in 1991, and their number gradually increased along with the development of the entertainment industry in Argentina. Currently, about 150 companies in Argentina manufacture and supply equipment for entertainment centers, many of which have experience working with different types of equipment and various suppliers. In the beginning of the 1990's, the first entertainment equipment manufactured by private companies in Argentina was casino tables, which did not require any complicated technologies. Starting from 1993, the production of slot machines began in Argentina. Up until now, most Argentine producers use components and software imported from outside of Argentina. Entertainment video slots are not yet produced in Argentina.
C. End User Analysis
The major consumer groups of slot machines are gaming and entertainment centers and casinos. For the last three years, gaming centers have been the fastest growing segment of consumers for slot machines. A quick return on investments from slot machines allows gaming center operators to invest into new gaming centers. Of the total sales from slot machine distributors, gaming centers constitute up to 90 percent. In order to satisfy the needs of various clients, gaming center operators are forced to buy equipment made by different manufacturers. Regardless of the intensity of the equipment manufacturers' promotional campaigns, all distributors make sure a certain percentage of their purchases go into maintaining an assortment of gaming systems.