When people think about passive investments, coin operated pool tables are likely not the first thing that comes to mind. Someone is far more likely to think about dividend-paying stocks or bonds, or even something slightly more active but with no employees like investing money online through a real estate crowdfunding site or P2P lender.
Coin operated pool tables are a real world (offline) business and do require some management, however, they can be very low maintenance and extremely lucrative if placed in the correct location(s).
What are Coin Operated Pool Tables?
Coin operated pool tables are pool tables that require players to insert coins in order to receive the pool balls so they can play a game. They typically require between 4 and 6 quarters ($1.00 to $1.50). Because everything is automated and no human employees are required, they function like a giant vending machine.
But in some sense they are better than a vending machine because if you are selling potato chips or a Diet Coke out of a vending machine, you still have a cost of each good sold. Coin operated pool tables have no variable cost; you are basically just renting use of the pool balls for the players to play one game. Once they are done playing, you still own the pool balls and can keep renting them to more players.
The pool table itself is expensive relative to the cost per game, but a properly-placed table could potentially last for tens of thousands of games.
Example of coin operated pool table for sale on Amazon
Who Uses Coins Anymore?
It’s a good question, but luckily the coin operated pool table makers are aware that people are moving to more digital payment forms. Many of the newer tables offer payments via quarters, a bill changer, and a way to pay with a credit card or by using your smartphone (Apple or Android). Even if you have a table that has coin only payments, there are kits to retrofit it so that it can accept bills and digital payments. Using digital payments also allow things like “Buy 1 Game, Get 1 Free” promotions, rewards and loyalty programs, and digital push marketing.
That being said, not all tables have been retrofitted to include digital payments. It is absolutely essential that players have access to coins. If the table is inside of a bar or restaurant that has a cash register stocked with coins, then you are probably OK. If not, you might want to consider also having a bill-changing machine nearby.
A Matrix conversion kit from Global Billiard Manufacturing
The Economics of a Coin Operated Pool Table Business
For someone who already owned a bar with some extra floor space, they could spend the money on a coin operated pool table, place it in their establishment and watch how much additional income it generates.
However, you don’t have to own a bar in order to make money. You can lease space from a bar or other business that has potential customers, and then pay rent to that business. This is typically done as a split (e.g. 50/50 of revenue) rather than as a fixed monthly amount (e.g. $300).
Your initial investment will be the cost of the pool table and any customization or installation costs. We will put a round number of $4500 for this upfront cost. You might spend an extra $500 for pool cues and extra pool balls to have on hand in case balls get lost or damaged.
We are also going to assume that you collect the coins yourself and don’t have to hire anyone else for maintenance.
A game of 8-ball lasts roughly 15 minutes. There are 96 fifteen minute intervals in a day. So if you charged $1.50 per game and the pool table was constantly being used 24/7, then you could make $144 per day.
However, let’s be realistic. People like to play pool during times when they socialize, maybe 5 to 10pm during the week and perhaps as late as 11pm or midnight on the weekends. Let’s say you had a great location that was in use constantly during those hours, but not really at all outside of those hours. You’d have 20 games a day in the evenings during the week and 28 games a day on weekends. Let’s add an extra hour per day (4 games) during other random times.
That’s $36 per day Sunday through Thursday, and $48 per day Friday and Saturday. That is $276 per week.
Now let’s assume you split the revenue 50/50 with the venue. Your split of the revenue is $138.
That may not sound like a ton of income, but keep in mind that your upfront investment was just $5000 and we are only talking about ONE week! Multiply $138 times 52 and you are at $7176 per year. You paid back your initial investment in less than 9 months.
Where are the Best Locations for Coin Operated Pool Tables?
The best possible location would be a busy pool hall or sports bar with a lot of dedicated space for pool tables and endless streams of players 7 nights a week. However, these are the locations that are most likely to just purchase the tables themselves and keep all the profit.
Most of these venues will not want to give up a large portion of the profit and some control in order to avoid spending $4000 to $5000 upfront for the coin operated pool table.
You are better off coming up with a location that has a moderate amount of traffic and/or one where the owner/operator of the building does not want to spend the money purchasing the table or the time managing it.
One entrepreneur found his best locations were fraternity houses. He went to several fraternities that were located on the same street (one of which he was an alumni of) and offered to install coin operated pool tables and split the revenue 50/50 with the fraternity.
He would handle everything from collecting and rolling the coins, to adjusting the table level, to replacing the felt surface, pool balls, and pool cues when necessary, to dealing with complaints. He even offered to design and place a custom felt surface with the fraternity letters. His pitch was designed to make it out like running the business was more cumbersome than it really was; the reality was that it was pretty simple. He was able to earn over $20,000 a year on a very part-time basis; he still worked full-time as an engineer.
Other locations that work well including lodges for fraternal organizations like the Elks, banquet halls, and other dedicated organization meeting places like VFW and other military organizations. Occasionally you will find a regular bar or bowling alley where the owner does not want to spend the money on the table and is willing to outsource it. Sometimes it comes down to the revenue split. If you promise them no upfront cost, no maintenance and a higher than 50/50 split, they are more likely to consider your pitch.
How Much Work is Required?
Once you secure the locations, there is not a lot of work required. You will need to collect the coins at least once per week and when you collect them, you can check on how the table and the felt look. You will definitely want to leave a contact number on the table so that the players or someone working at the business can call you if pool cues break or if there are missing pool balls, jams, or other issues.
A well-built table will hold up well against the test of time, will stay level, won’t jam very often, and will be hard for thieves to break into. However, like any business, you have to remember Murphy’s law and be ready for the worst.
A lot of damage can be prevented by picking the right venues. Another tactic that works is to have the cost of damage repairs or replacing balls, cues, etc. come out of the venue partner’s split.
That way they won’t tolerate openly destructive behavior.