Increased Gaming Machine Numbers for Clubs from 1 January 2005

Jarrod True specialises in advising societies and clubs who are involved in the gaming industry. Jarrod has been actively involved with compliance issues that has arisen under the new Gambling Act 2003. Jarrod’s article discusses the procedure and process when applying to the Minister of Internal Affairs for permission to operate additional machines.

The general rule is that sites that existed on 17 October 2001 may operate a maximum of 18 gaming machines, while sites that were established after 17 October 2001 may operate a maximum of 9 machines. From 1 January 2005 an application can be made by clubs to operate additional machines above the 9 and 18 machine limits. Clubs can now apply to have 30 machine sites.

Only clubs may apply to the Minister to operate additional machines. A club is defined as “a voluntary association of persons combined for a purpose other than personal gain”. Any organisation which is an incorporated society falls within this definition.

The application to the Minister is simply in the form of a comprehensive letter. There are no specific forms to complete. The Minister has advised that there is no internal policy on how applications will be determined. Each application will be determined on a case by case basis.

Club Mergers – 30 Machine Sites

An application to operate up to 30 machines must be made jointly by two clubs. Both clubs must hold Class 4 Operator’s Licences and Class 4 Venue Licences.

The clubs must show that they have a significant history of operating as clubs and a significant history of operating their current number of machines.

The clubs must confirm that they intend to merge into a single club. The merged clubs must have a substantial active membership.

The merged clubs must operate at a single non-commercial venue. To qualify to operate up to 30 machines, the venue at which the clubs plan to operate from must have held a Class 4 Venue Licence on 17 October 2001.

Before the clubs apply to the Minister they must first obtain Territorial Authority consent to operate the desired number of machines at the proposed new venue. Each Territorial Authority has a Class 4 Gambling Venue Policy. The policy sets out the maximum number of gaming machines permitted in the region as a whole and the maximum number of machines permitted at individual venues. A copy of the policy and consent application form can be obtained from your local Territorial Authority.

The policy should clearly set out whether more than 18 machines are permitted at any one site. Some policies have an 18 machine maximum limit with no exceptions. This will prevent additional machines being obtained. Other policies expressly allow for up to 30 machines in the case of clubs that propose to merge. Some policies are ambiguous. If the policy contains an express term allowing up to 30 machines, the application to the Territorial Authority is relatively simple and will be granted as a formality. If the policy is ambiguous, a more detailed and persuasive application should be submitted. An ambiguous policy is likely to be unenforceable by the Council if challenged.

Once Territorial Authority consent has been obtained and the Minister is satisfied of the above points, approval is given to operate up to 30 machines. If both clubs operated a total of less than 30 machines at the time of applying (e.g. each club operated 13 machines each) the Minister may only grant approval for the total combined number of machines, i.e., in the above example, a total of 26 machines.

Once Ministerial consent has been obtained, both clubs apply jointly to the Department of Internal Affairs for a Class 4 Venue Licence in the same manner as if the Class 4 Venue Licence was being renewed. The new Class 4 Venue Licence is issued once the Department is satisfied that the clubs have formally merged.

Single Clubs Which are Currently Limited to 9 Machines

A club which did not hold a Class 4 Venue Licence on 17 October 2001 has previously been limited to a maximum of 9 machines.

As from 1 January 2005 the club can now apply to the Minister for permission to operate up to 18 machines. The process is identical to that as detailed above, but the procedure does not require two clubs to have merged. The club simply has to demonstrate that it has an active membership and a significant history of operating as a club etc. Once approval is granted by the Minister, the club makes an application to amend its Class 4 Venue Licence to include the new machines.