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Published: Monday, 4/24/2006

Firm finds a winning combination in rebuilding of old slot machines

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER
Paul Myers ponders a repair on a slot machine at the Delaware Avenue firm, which sells about 1,000 machines a year. Paul Myers ponders a repair on a slot machine at the Delaware Avenue firm, which sells about 1,000 machines a year.
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Fred Franklin has spent hours in front of slot machines and hasn't lost yet.

The 63-year-old owner of Toledo's Rec Room Specialties Co. oversees reconditioning of the devices for home use.

"I'm an electrical engineer by trade," he explained. "Many years ago, I started collecting slot machines and old mechanical stuff. One thing led to another and I decided to start my own business."

Today, his firm, 1401 West Delaware Ave., supplies about 1,000 reconditioned slots a year to three dozen retailers in seven states. The machines, most of them produced since 1993 for casinos by Chicago's Bally Manufacturing Corp., sell for about $1,000 in stores such as Champion Amusements, Sylvania.

"If our customers experience problems we can always go back to Rec Room and they'll take care of us," said Dave Shinaver, Champion owner.

"We've probably sold about 200 of Fred's machines over the last four years," he added. Customer complaints have been few.

"These things are made to run 24 hours a day, seven days a week," Mr. Shinaver said.

Mr. Franklin's business has evolved significantly since its founding in 1995.

To his product line, he has added school desks and other institutional furniture. Those products tend to sell fastest in June, July, and August, when slot machine sales slip.

"Slots sell best in October, November, and December," Mr. Franklin explained. "We're basically a Christmas toy store."

Annual revenues have dropped by half to about $500,000 annually with the decline in popularity of once- hot pachislo slot machines, which are imported from Japan.

"That's an area that's run its course," explained Mr. Franklin.

"They used to be 85 percent of our business. But it's hard to give them away now."

The firm's preferred slots now are 10-year-old Bally models, which technicians have become skilled at modifying for relatively trouble-free home use.

But other firms supplying the home market have discovered the same secret. "They're hard to find," Mr. Franklin said. "We have 250 of them coming from one of the casinos in Mississippi." But the Toledo firm studiously avoids buying machines from casinos flooded in hurricanes. Once immersed in water, slot machines are usually worthless, he explained.

Modifications take various forms. In states like Ohio, where the machines are legal in the home as long as they aren't used for gambling, slots don't look or operate much differently than in casinos. In states with stricter laws, they must be adapted to no longer accept coins or tokens, and serve mainly as novelty lamps.

To make up for the decline in slot sales, Rec Room Specialties is seeking licensing to allow it to install and fix casino slot machines.

The firm does not perform retail repairs of slots. But it gets frequent calls from people seeking such service or offering to sell an ancient slot machine. There is little market for old machines.

"We restore only relatively modern stuff," Mr. Franklin explained. "We try not to tell people that they're likely going to have to pay somebody $50 to haul away their treasure."

Contact Gary T. Pakulski at: gpakulski@theblade.com or 419-724-6082.

Small Business Profile is a weekly feature on local companies. To be considered, send information about your company to Small Business Profiles, Business News, The Blade, P.O. Box 921, Toledo, Ohio 43697-0921.



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