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Recent Updates

 

32.03   Player Assessment and Player Conversation Requirement

In BlueSky Community Trust decision GC14/24, the Commission refused to endorse the Department’s position that a separate conversation must be had each time a sign of harm is observed.  The Commission also refused to endorse BlueSky’s position that only one conversation per day is required.

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28.12   Limited Class 4 Jurisdiction

The Commission has jurisdiction to hear an appeal relating to a refusal to approve a problem gambling policy:  BlueSky Community Trust decision GC14/24.

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10.08   What Amounts to a “Condition”?  Implied Licence Conditions

In BlueSky Community Trust decision GC14/24, the Commission rejected the concept that licence conditions may be implied. 

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31.02   Extension Applications

The ability to grant an extension to the inactivity period was considered by the High Court in Feed Families Not Pokies Aotearoa Inc v Secretary for Internal Affairs [2024] NZHC 3719 [9 December 2024].  Justice Grau refused to make declarations limiting the power.

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31.03   Licence Surrender Automatic

If a society fails to surrender the venue licence as required by sections 71(1)(g) and 79(1)(a), the licence is deemed to be no longer held, and the six-month period commences: Feed Families Not Pokies Aotearoa Inc v Secretary for Internal Affairs [2024] NZHC 3719 [9 December 2024].

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24.04   When Does the Unlicensed Period Start?

The relevant period is the period when the venue licence is no longer held, not the period when the gaming machines are not operating.

 

Section 71(1)(g) requires a society to notify the Department if it has not conducted class 4 gambling at a venue for more than 4 weeks, and to then surrender the venue licence under section 79(1)(a).  If a society fails to surrender the venue licence as required by sections 71(1)(g) and 79(1)(a), the licence is deemed to be no longer held, and the six-month period commences: Feed Families Not Pokies Aotearoa Inc v Secretary for Internal Affairs [2024] NZHC 3719 [9 December 2024].

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24.05   Backdating of Licences

The Department and the Commission may issue a backdated licence in appropriate cases to preserve the right to host up to 18 machines.  However, the licence cannot be backdated to a date before the Department receives a complete licence application: Feed Families Not Pokies Aotearoa Inc v Secretary for Internal Affairs [2024] NZHC 3719 [9 December 2024].

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38.27   Online Gambling – Class 1, Class 2 and Class 3

Class 3 lotteries are excluded from the definition of remote interactive gambling.  This exemption was made permanent on 1 November 2024.   This means that class 3 lottery and raffle tickets may be sold online, and payment can be made remotely, including via credit card.

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16.08   Primary Activity Must be Offered and Available When Gaming Machines are Operated

The Commission has suggested that while the primary activity must be offered and available, the main use licence condition is satisfied if the primary activity, such as the sale of alcohol, is offered and available unlawfully, say due to the lack of an alcohol licence:  Section 81(3) Complaint re Toucan Bar and Bistro and Aotearoa Gaming Trust decision GC08/24.

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28.02   No General Right of Appeal From Gambling Commission Decisions – Judicial Review Available

In respect of class 4 gambling matters, there is no general right to appeal Gambling Commission decisions to the High Court.  However, Gambling Commission decisions may be challenged by way of judicial review.  Misunderstanding and misapplication of a statute is grounds for judicial review: Unison Networks Ltd v Commerce Commission [2008] 1 NZLR 42 (SC) at [51]-[52].

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37.06   Online Gambling Advertising - Free-to-Play Sites – Gambling Advertising Code

For the purpose of the Gambling Advertising Code, a “gambling advertisement” includes an advertisement for free-to-gamble activities.  Below are some examples of decisions from the Advertising Standards Authority:

 

·       Decision 23/290 – JackpotCity.net – billboard, website, radio and television ads – Upheld in part.

 

·       Decision 23/171 – JackpotCity.net billboard ad– Upheld in part.

 

·       Decision 23/069 – Wildz.net television ad – No further action.

 

·       Decision 21/196 – Casumo.net television ad– No grounds to proceed.

 

·       Decision 17/384 – JackpotCity.net television ad– No grounds to proceed.

 

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28.17   De Novo Hearing – Ability to Have Regard to New Evidence and New Information

In the Dragon Community Trust re The Awesome Farmer decision GC07/24, the Department refused to undertake key person checks in relation to the new key persons that were put forward as part of the appeal process.  The Commission was critical of this approach.  The Commission stated that this did not provide it with the contribution it expects from the Department and hindered its ability to efficiently make informed decisions on all matters before it.  The Commission considered it appropriate to adversely comment on the Department’s practice of electing to present only limited argument and failing to address all the issues arising during the appeal.

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28.27   Strike Out Applications

In the New Zealand Community Trust re Flannaghan’s Irish Pub decision GC04/21, the Commission expressed reservations about striking out, as abuses of process, appeals which relied on new information about changes after the Department’s decision, pointing out that section 77(3)(d) had not been considered in Infinity Foundation Limited decision GC07/07.  In Dragon Community Trust re The Awesome Farmer decision GC07/24, the Commission declined to strike out an appeal that was based entirely on new information (information that was not available when the Department made the original decline decision).

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15.01   Are Liquor Licences Required?

In the Dragon Community Trust re The Awesome Farmer decision GC07/24, the Commission declined to grant a venue licence when a liquor licence application had been lodged but was not yet approved (the liquor licence application was subject to an objection and was awaiting a hearing).  The venue licence was declined, despite an affidavit being provided that the venue intended to operate as a tavern, and the venue having a clear history of operating as a very popular and successful Irish Pub.  The Commission declined the venue licence as it was not satisfied that the venue would not be used mainly for class 4 gambling in the absence of a liquor licence, and considered that the venue needed to be able to demonstrate an ability to conduct class 4 gambling within four weeks of the venue licence being granted.

 

The Dragon Community Trust re The Awesome Farmer decision GC07/24, appears to be contrary to the Commission’s two prior decisions. The two decline grounds cited by the Commission are questionable…

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34.42   Duty to Process Applications – Delay by the Department

The courts have held that where a statute provides for the grant of a licence or permit, the nominated statutory decision-maker must consider and determine an application; they cannot refuse to consider the application, nor can they delay consideration unreasonably.  If the decision-maker refuses to consider an application or unreasonably delays an application, a High Court order can be sought requiring the making of a decision.

 

It is also unlawful to delay a decision until an imminent change of law or policy which is adverse to the applicant has come into operation.

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18.15   Clubs and End User Trusts - Requirement to Apply or Distribute Net Proceeds Regularly

The licence condition requires net proceeds to be applied or distributed regularly so there is no accumulation of funds in the club’s dedicated gaming account.  By email dated 15 April 2024, the Department advised that generally it considers an accumulation of up to 7-9% of gross proceeds acceptable. 

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32.22   Policy for Identifying Problem Gamblers – Harm Minimisation Policy

In December 2023, the Department developed a harm minimisation policy checklist that includes the items the Department expects to be included in a harm minimisation policy and statement.  A copy of the checklist can be downloaded from the online version of the Guide.

 

In June 2024, the Department developed a template harm minimisation policy and supporting guidance. A copy of the template can be downloaded from the online version of the Guide.

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22.03   Depreciation Guidelines and Prior Comments

In September 2023, IRD published updated guidance recommending gaming machines be depreciated at a straight-line rate of 21% or a diminishing value rate of 30%.

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34.41   Consultation Requirement – Regulations

Before certain gambling regulations are made, the Minister, or the Department, must consult with persons or organisations who are likely to be substantially affected by the relevant regulations: s 372.

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22.09   Waikiwi Tavern Precedent

In February 2024, the High Court in Feed Families Not Pokies Aotearoa Inc v Secretary for Internal Affairs [2024] NZHC 217 [19 February 2024] found that the types of relocation that were previously permitted under the Waikiwi precedent were no longer available as a result of the amendment that was made in September 2013 to give territorial authorities jurisdiction over venue relocations.

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New Chapter 32 – Harm Minimisation Measures

Chapter 32 has been completely rewritten and now includes references to the new harm minimisation regulations, the litigation in relation to the regulations, and the Department’s guidance on the regulations.

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28.24   No General Declaratory Jurisdiction

The Commission does not have jurisdiction analogous (or limited) to that of the High Court in judicial review to set decisions aside on the basis of the recognised grounds of judicial review.  The Commission’s powers are statutory appeal powers, as set out in section 61; namely, to confirm, vary or reverse the Department’s decision or to remit it to the Department to reconsider with directions: Royal Oak Bowls decision GC07/23.

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28.28   Technical Procedural Defences

In Royal Oak Bowls decision GC07/23 the Commission allowed an appeal based solely on procedural issues. The Department provided the club with a proposal to refuse to renew their operator’s licence, but having received submissions in response to that proposal, then issued a decision to cancel the licence. The Commission noted that a refusal to renew was different than cancellation in that they involve the exercise of a different statutory power and have different tests (refusals to renew are mandatory if certain criteria are not met, while cancellation is discretionary).  The Commission found that the procedure for cancelling an operator’s licence as set out in section 59 was not followed.  While section 59 does not expressly require consistency between the proposal and the decision, the Commission stated that it is a reasonable implication as a matter of fair process that notified proposal should be consistent with the subsequent decision.  The Commission held that decisions to refuse to renew a licence and to cancel a licence both require a statement of the reasons for each decision.  The Commission described the Department’s procedural errors as numerous and persistent.

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28.29   Natural Justice

In Royal Oak Bowls decision GC07/23, the Commission stated that there was no question that it was obliged to comply with the requirements of natural justice in discharging its functions. The Commission noted that this was confirmed by the decision of the Court of Appeal in The Secretary for Internal Affairs v Pub Charity [2013] NZCA 627, at paragraph 76.

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24.01   9 and 18 Machine Limits

The Gambling Fees Regulations were amended, effective 1 July 2023, to provide that fees were only payable in respect of machines connected to the electronic monitoring system.  Non-operational machines are therefore no longer subject to the annual compliance fee per gaming machine.

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3.05      Venue Key Persons

A person remains a venue key person during a period of venue inactivity, including during a lengthy period of inactivity due to renovations being undertaken at the venue: Ong v Department of Internal Affairs [2023] NZHC 1014.

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37.11  Brumbies’ Jersey Example

On 24 March 2023, the Brumbies played the Crusaders in Christchurch.  The Brumbies’ jersey included the TAB.com.au logo.  The Department advised the Brumbies that this was a breach of section 16, and received an assurance that the logo would be removed from the Brumbies’ jersey in future Super Rugby seasons when the games are played in New Zealand.

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37.12   22BET YouTube Example

In 2023, 22BET, a Cyprus-based gambling company, aggressively marketed its 22BET service via a series of YouTube ads.  This triggered a complaint to the Department by the Problem Gambling Foundation.

In responding to the complaint, Dave Robson (Director Gambling) stated:

 

As 22BET conducts its operations overseas, and as YouTube is not hosted within New Zealand, any advertisements displayed on these platforms fall outside the Department’s jurisdiction as regulator.

 

The Department did, however, write to 22BET, outlining its “expectations” around the ads.

 

12.14   Venue Payment When GMP Has Been Written Off

The standard commission-based venue payment is still applicable and payable when the GMP in question has been stolen and then subsequently written off. 

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2.04      Cash Prizes – Amateur Sport

The Department has provided inconsistent guidance as to whether an amateur player may receive cash prizes.

 

In the September 2007 edition of Gambits, the Department advised that an amateur sportsperson could receive the “occasional small cash prize”.

 

The Department’s website (as at March 2023) advises that amateur sportspersons cannot receive any cash prizes which result in personal gain.  The website records that the definition of “amateur” which is approved by the Department is:

 

Any activity that is played or carried out as a pastime which excludes the payment of money or monies (including prizes) to any individual for personal gain. 

 

On 24 January 2023, the Department approved a grants policy (CRM:0418419) that included the following section on cash prizes:

 

Other events that offer prize money of no more than $150.00 per person are acceptable unless such events are held regularly, and one particular sportsperson is likely to regularly receive the major prize.  If one particular person does regularly receive cash prizes, enquiries will then be made to ascertain what costs the person incurs in participating in the sport.  Funding will only be made if the prize money received is less than the costs incurred.  However, as a general rule, if one individual is likely to receive more than $5,000.00 in cash prizes per annum, this will make the event unacceptable.

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24.01   9 and 18 Machine Limits

The Department has advised that societies will have until 31 March 2023 to increase the number of machines listed on their venue licences to preserve a machine entitlement.  However, any amendment made from 1 September 2022 to reduce the number of machines listed on a venue licence, will result in the maximum operating entitlement being reduced to the new number of machines listed.

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18.15 Clubs and End User Trusts - 37.12% and the Requirement to Apply or Distribute Net Proceeds Regularly

The Department has developed a new 2022 policy on the minimum return for authorised purposes for clubs. The document “Operational Policy: Club Minimum Return” states…

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10.05   External Entrance Licence Conditions

In Aotearoa Gaming Trust – Glasine’s Café and Bar decision GC07/22, the Commission upheld a licence condition requiring a secondary entrance into the gaming room to be closed and locked while the gaming machines were in operation.  The second entrance allowed direct access into the gaming room from the mall.  The second entrance was in direct line of sight from the bar, but only if a staff member was positioned on the side of the bar that faces the second entrance and was looking left into the gaming room. 

 

While ultimately upholding the original condition imposed by the Department, the Commission did request submissions on two alternative compromise conditions it had drafted, namely…

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33.01   Unconditional Surrenders – Requirement to Provide a Surrender Letter

In Four Winds Foundation Limited v New Zealand Community Trust [2022] NZHC 767, the High Court considered whether there was a requirement on the outgoing society to provide the new society with a surrender letter in order to facilitate a venue transfer with minimal downtime.  Justice Cooke held that…

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1.18      Facial Recognition

The Department now accepts that the costs associated with the use of facial recognition technology to assist with detecting excluded persons at large venues, or venues with a large number of exclusions, is an actual, reasonable, and necessary cost.

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7.05      Section 340 – Search Warrants

The Department’s practice is to execute search warrants in the early hours of the morning (typically around 6am).  They will normally surround the property before knocking on the door.  The Department’s Health and Safety policy directs that stab resistant body armour (dark vests) be worn when a search warrant is executed.

 

If the Department is exercising a search power in respect of data held in a computer system or other data storage device such as a smart phone, the Department can require a person subject to the search to provide access information (pin numbers and passwords) and other information or assistance that is reasonable and necessary to allow the Department access to the data.  Any person who fails, without reasonable excuse, to assist the Department to exercise the search power when requested to do so commits an imprisonable offence: ss 130(1) and 178 of the Search and Surveillance Act 2012.  While the general protection against self-incrimination applies, this does not extend to refusing to provide access information (pin numbers and passwords) to gain access to electronic data: s 130(3) of the Search and Surveillance Act 2012.

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38.15   Non-Gambling Events - Events Where Players Do Not Seek to Win Money

The definition of gambling provides that the paying or staking of consideration must be done to seek to win money.  “Money” is defined in section 4 and includes “money’s worth”.

 

In 2021, Timezone started to offer large prizes including iPhones, MacBooks, and 50” televisions.  An investigation was undertaken by the Department. The high value electrical goods were considered to be “money’s worth”, making the playing of games such as the Wheel of Fortune, illegal gambling.  As a result of the investigation, Timezone agreed to remove the major prizes.  The prizes offered then reverted to plush toys, novelty items such as slime, and confectionery.

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30.30   Advising EMS Service Desk – Gaming Machine Changes

Where gambling equipment is to be installed, removed, modified, or serviced, the venue manager must confirm that the service staff have contacted the EMS service desk before allowing the service staff entry to the gambling area or issuing them with the machine keys.  This does not apply to general servicing of gaming machines.  It does, however, apply to machine software changes, ram clears, any EMS site controller power changes, any EMS router power changes: game rule 1.0(1).

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30.32   Tickets from 3C Printers

Tickets issued from a 3C printer (such as a 3C printer connected to a QEC terminal) have unique rules…

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3.06      Landlords

In 2022, the Department took the view that a clause within a lease that enables the landlord to determine which gaming society operated at the venue, brought the landlord company, its directors and shareholders within the venue key person definition as the condition enabled the landlord to have the ability, directly or indirectly, to exert a significant degree of influence over the management or operations of the venue operator.

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