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Recent Updates

 

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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31.02   Extension Applications

A procedural delay or error, outside the society or venue’s control, which has resulted in the venue being unable to conduct gambling is noted as an example of an “unforeseen circumstance”.

 

The Department has granted an extension to allow time for a new venue operator to obtain a liquor licence when delays in obtaining a liquor licence were likely due to the timeframes for the Police and Medical Officer of Health to report being suspended as a result of the COVID-19 pandemic, and likely delays due to vexatious and meritless liquor licence objections by anti-gambling activists.

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38.27   Online Gambling, Gambling Apps, Text and Phone Gambling

Class 3 lotteries are excluded from the definition of remote interactive gambling for the 3 year period from October 2021 through to October 2024: s 4A(3).   This means that during this period, class 3 lottery and raffle tickets may be sold online, and payment can be made remotely, including via credit card.

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24.01   9 and 18 Machine Limits

All the machines that are listed on the schedule do not need to be connected to the electronic monitoring system: Kiwi Gaming Foundation decision re Woodend Tavern GC19/21.

 

The requirement to obtain territorial authority consent to increase the number of machines listed in the schedule is a departure from the standard practice that has been in place.  The Commission has acknowledged that its April 2021 decision clarifying when territorial authority consent is required has the potential to cause serious consequences for societies and venues.  The Commission therefore held that societies may restore their machine number entitlements.  This can be done by filing a licence amendment to add additional machines to the schedule, in order for the number in the schedule to match or exceed the maximum number condition.  The Commission initially indicated that such an amendment should be filed before the society’s next licence renewal.  In the subsequent October 2021 decision, Kiwi Gaming Foundation decision re Woodend Tavern GC19/21, the Commission noted that any operational delay caused by the Department not being able to process applications to restore machines, would not result in licence holders being deprived of the opportunity to preserve their machine number entitlements.

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32.05   Section 308 Prosecution - Failing to Use Policy

The requirement to “use” the policy includes a requirement to act in accordance with the policy terms, and to take steps that are reasonable in implementing the policy (common sense matters that arise naturally and matters that are in accordance with prevailing industry standards or in the training that is provided).  However, there is no obligation to take steps that are not plainly self-evident or not indicated as mandatory in the training.

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29.00   Three-Year Licences

In the 30 June 2021 edition of Gambits, the Department advised that it had made the decision to stop offering three-year licences, effective immediately.   This decision was challenged via judicial review.  Following receipt of the judicial review proceedings, the Department acknowledged that its decision that three-year licences cannot even be considered, was an unlawful fettering of the section 53(1A) discretion.  Accordingly, the Department acknowledged that societies remain free to apply for a three-year licence if they wish.

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25.06   Club Merger Examples

New example included.

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16.09   Primary Activity and Alcohol Licences

The Alcohol Regulatory and Licensing Authority has become concerned that venues with gaming machines are being subject to alcohol licence objections based on matters relating to gaming machine activity, rather than issues that relate to the risk of alcohol-related harm.  The Authority has stated that gaming-related objections are use of the Act for a “collateral purpose” and as such are an “abuse of process”.

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24.01   9 and 18 Machine Limits

The requirement to obtain territorial authority consent to increase the number of machines listed in the schedule is a departure from the standard practice that has been in place.  The Gambling Commission has acknowledged that its April 2021 decision clarifying when territorial authority consent is required has the potential to cause serious consequences for societies and venues.  The Commission therefore held that societies may restore their machine number entitlements.  This can be done by filing a licence amendment to add additional machines to the schedule, in order for the number in the schedule to match or exceed the maximum number condition.  The Commission has indicated that such an amendment should be filed before the society’s next licence renewal. 

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24.04   When Does the Unlicensed Period Start?

If a venue licence is surrendered via a surrender letter, the six-month period does not start on the date specified in the surrender letter; the six-month period starts on the following day.  For example, if a surrender letter stated that the society surrendered its venue licence on 11 December, the six-month period would start on 12 December.

 

The six-month period starts on the day following the date in a surrender letter, not on the day the Department processes and actions the surrender in its licensing system.

 

If the Department generates a licence in its licensing system (for administrative reasons such as the removal of machines listed in the schedule, or in error), but does not issue the licence to the society, the new licence generated does not result in the six month period restarting.

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24.05   Backdating of Licences

Delays due to the Covid-19 alert level restrictions, and delays in assessing third party services immediately following the end of the Covid-19 alert level restrictions, are relevant to the exercise of the discretion.

 

In Air Rescue Services Limited decision GC26/10, the Commission referred to the sort of difficulties that are inevitably created when a venue undergoes redevelopment and stated that there is nothing objectionable in principle in seeking a licence for premises which are undergoing renovation.  In Pub Charity Limited decision re Matata Hotel GC03/21, the Commission backtracked from these comments, stating that an applicant who decides to undertake a major renovation elects to run the risk that the renovation will result in the ability to operate more than 9 machines being lost.

 

Although it is not essential that a formal request be made to backdate the venue licence, the failure to expressly make such a request is relevant to the exercise of the discretion.

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31.02   Extension Applications

If the Department refuses to grant an extension, no immediate right of appeal exists.  If a society wishes to challenge the correctness of a refusal decision, the correct process is to not surrender the licence and for the society to advise the Department that it regards the refusal to be in error and that it intends to challenge any decision which is made in reliance upon it.  The society then waits until the Department takes venue licence cancellation action, and then lodges an appeal against the cancellation.

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31.03   Inactivity Applications and Gaming Machine Fees

Prior to April 2021, there was an established practice of filing a licence amendment to reduce the number of gaming machines listed on the licence when a venue was inactive, to reduce the machine licensing fees payable. Following the decision Pub Charity Limited decision re Matata Hotel GC03/21, such action should not be taken.  Removing the machines from the schedule would result in the need to obtain territorial authority consent to restore the machines. 

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16.09   Primary Activity and Alcohol Licences

If a venue does not fall within the definition of a “tavern”, “restaurant”, or “hotel”, the venue has the option of applying for a generic or “not otherwise specified” alcohol licence.  A venue does not need to fall within the traditional definition of a “tavern”, “restaurant” or “hotel” to qualify for an alcohol licence.

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2.37   Is Amateur Sport a Charitable Purpose?

New non-charitable sport examples included (New Zealand Rowing Association, Northern Region Equestrian Trust, and Youth Glide New Zealand)

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18.17   Clubs and End User Trusts – Undistributed Net Proceeds – Working Capital

Regulation 11A, which allows societies that mainly distribute net proceeds to retain enough gross proceeds to enable them to maintain a ratio of current assets to current liabilities of up to a maximum of 1.5:1 (calculated as current assets divided by current liabilities) does not apply to societies that mainly apply funds (typically clubs): regulation 9 of the Gambling (Class 4 Net Proceeds) Regulations 2004.  A club is, however, free to apply to have a licence condition included on its licence that mirrors regulation 11A, in order to enable a larger amount of proceeds to be retained as working capital.  The Commission has confirmed that such a licence condition can be lawfully imposed and would be reasonable.  The Commission considered that applying societies should not be subject to greater restrictions on the retention of net proceeds for working capital purposes than distributing societies: Youthtown Inc decision GC26/20.

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19.01   The Legal Test For Financial Viability

While section 52(1)(c) requires satisfaction that the applicant’s proposed gambling operation is viable, the financial viability assessment includes consideration of the financial viability of the applicant itself (the club generally, when a club is the applicant): Waitara Town & Country Club decision GC21/20.

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19.02   Forward Focused Test

The financial viability assessment is not limited strictly to the term of the prospective licence.  The applicant’s financial position at the end of the prospective licence period and beyond is relevant: Waitara Town & Country Club decision GC21/20.

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28.37   The Treaty of Waitangi

The Commission has no obligation to consider applications and appeals by reference to Treaty principles.  There is no express reference to the Treaty or its principles in the Gambling Act 2003 and no apparent basis to imply an obligation to observe or apply Treaty principles.

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18.01   Regulation 10 – Obligation to Generate 40% of Gross Proceeds

Following the Covid-19 pandemic, the minimum authorised purpose requirement was suspended for each licence holder’s financial years ending in 2020 and 2021.  This means that societies that are unable to meet a 40% return to the community will not be penalised for the 2020 and 2021 financial years.  The suspension does not remove the general ongoing obligation to minimise costs and maximise community returns.

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18.10   Regulation 11 - Obligation to Distribute or Apply All or Nearly All Net Proceeds

Following the Covid-19 pandemic, the obligation to distribute or apply net proceeds was suspended for each licence holder’s financial years ending in 2020 and 2021.  The suspension of regulation 11 provides societies with an opportunity to accumulate adequate working capital to achieve financial viability.

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18.14   Regulation 11A – Retention of Net Proceeds

Regulation 11A enables societies to retain enough gross proceeds to enable them to maintain a ratio of current assets to current liabilities of up to a maximum of 1.5:1 (calculated as current assets divided by current liabilities).  The retention is permitted solely for the purpose of satisfying the requirement in section 52(1)(c) that a society’s gambling operation must be financially viable.  Regulation 11A does not affect the requirement on societies to distribute a minimum of 40% of the gross proceeds to authorised purposes for the financial year ended 2022 and subsequent years.

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24.05   Backdating of Licences

New commentary and new examples following two new successful Gambling Commission appeals.

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24.04   When Does the Unlicensed Period Start?

Liquidation does not automatically terminate a venue licence.  Clear and unqualified communication is required to surrender a venue licence.  No particular form or wording is required.  An email is sufficient.  Anything in the communication which indicates that the advice is preliminary or provisional and will be followed by further communication, should be taken as an indication that the communication does not constitute a surrender.  Mere advice that the venue has been placed into liquidation and ceased operating is insufficient to constitute a licence surrender: Youthtown Inc decision GC10/20.

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15.01   Liquor Licences are not Required

In Grassroots Trust Limited decision GC09/20, the Department insisted on a liquor licence being granted as a prerequisite for a venue licence being issued.  The Department failed to have regard to whether there was other evidence that class 4 gambling would not be the primary activity at the venue, including the floor plan and lease.  The Department also failed to consider whether the venue licence could be issued before the liquor licence, with appropriate licence conditions being imposed.  The Commission reiterated that it had previously held that an issued liquor licence is not a precondition to a venue licence application being considered or approved, where other evidence is available to satisfy the requirement that the venue will not be used mainly for operating gaming machines.  The Commission noted that the additional delay caused by insisting on the issue of a liquor licence was a relevant factor in considering whether a venue licence should be backdated to preserve the right to operate 18 machines.

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4.02   Onus of Proof When Determining Suitability
Any doubts about the person’s suitability result in a finding of unsuitability.
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3.05   Venue Key Persons
An ability to “exercise soft power” or “exercise soft influence” via relationships or due to senior hierarchy status has been previously held to be sufficient to fall within the venue key person definition.

 

The reference to having an “ability” to exert a significant degree of influence over the management or operations of a venue operator does not require a current practice of actual influence, nor an immediate legal ability to act. The term “ability” does, however, imply that a person must be able to take an action lawfully, if certain steps were put in place.
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3.09   What Amount is “Significant”?
A “significant interest” in the management or operations of a venue operator exists where the person controls the financial or other benefits from the venue. Control extends to being able to direct or ensure that the benefits are received by another person.
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12.02   Obligation on Society to Disable Machines and Notify the Department

The Department’s March 2020 Late-banking of Gaming Machine Profits Policy advises that…

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12.06   Late Banking Penalty – Section 104

In March 2020, the Department updated its late banking policy.  The action taken by the Department following a late banking will depend on whether the Department assess the incident of late banking to be high-risk or low-risk.

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5.04      Section 113(1)(a)

Venue key persons cannot provide grant application forms (grant forms from any gaming society): s 113(1)(a)

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32.05   Exclusion Order Start Date/Time and End Date/Time

If the exclusion order reads “this exclusion order shall remain in force for a period of two years from 10 March 2020 to 9 March 2022” then the exclusion order does not take effect until 11 March 2020 and ceases to have effect on 10 March 2022.

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34.16   Multiple Class 4 Venues in One Place

In New Zealand Racing Board decision GC24/19, the Commission allowed a new class 4 venue to be established in the same building as an existing class 4 venue on the condition that the internal access way connecting the two venues be removed.  The large building included three tenancies: TAB Newtown; the Zoo Bar (an existing class 4 venue); and a Thai restaurant.  All three tenancies were located on the same large certificate of title and had the same landlord.  TAB Newtown and the Zoo Bar were independent businesses.  The Zoo Bar’s venue licence showed the large building with all three tenancies, but had the TAB Newtown and Thai restaurant tenancies crossed out.  Both venues had separate primary activities.  TAB Newtown’s primary activity was race and sports betting (the venue was alcohol free).  The Zoo Bar’s primary activity was the sale of alcohol (the venue licence described the venue as a tavern). 

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28.33   Costs – New Zealand Racing Board Example

In New Zealand Racing Board decision GC24/19, the New Zealand Racing Board sought costs against the Department for failing to honour a venue licence pre-approval that was given and delay in decision making (four and a half months).  The Commission declined to make an award of costs, stating that the matter was not an exceptional case that justified an award. 

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38.20   Online Gambling, Gambling Apps, Text, and Phone Gambling

Remote interactive gambling is defined as including “gambling by a person at a distance by interaction through a communication device”.  A “communication device” is defined as “a machine, device, or thing for communicating at a distance and using any technology (including telecommunication, radio-communication, and broadcasting technology)”.  Undertaking an activity such as the sale of lottery tickets via the post is not considered to be remote interactive gambling, as there is no use of a communication device.

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36         Sales Promotion Schemes

The requirement for all online sales promotion schemes to be in the form of a lottery prohibits an instant win being offered via a remote interactive method (where there is no element of remote interactive gambling whatsoever involved, instant win games and prize competitions are still legitimate forms of sales promotion schemes).  Scratch and win games (scratchies), lucky dips, and mystery envelopes are examples of instant win events.

 

The requirement for all online sales promotion schemes to be in the form of a lottery prohibits the outcome of an online promotion being determined partly by knowledge or skill (when the outcome is determined partly by knowledge or skill, the event is a “prize competition”, not a “lottery”).

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28.13   At What Point is There a Decision Which May be Appealed?

A decision is appealable once it has been formally communicated in a way indicating that it is not provisional or preliminary, or otherwise indicating that it is final.  While such communication will usually take the form of a notice complying with section 67(2), full compliance with section 67(2) is not essential for a decision to be appealable.  A notice that does not fully comply with section 67(2) will give rise to a right to appeal if it is given in final terms.

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37.15   SkyCityCasino.com Example

In August 2019, SkyCity Entertainment Group launched its online gambling site – skycitycasino.com.  To avoid breaching New Zealand law, the website is operated via a Maltese subsidiary, using a platform, gaming content, managed services and front-end developed by Malta-based Gaming Innovation Group.

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28.03   Judicial Review and the Limits on Judicial Review Challenges and Other High Court Proceedings – Section 235A

Section 235A only prevents judicial review or other relief once a decision has been made and is capable of appeal.  It does not prevent a judicial review application seeking to have a decision made in the first place.

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12.14    GMP Write Off Applications - Prior Examples

New example included.

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25.06    Club Merger Examples

New example included.

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12.02    Obligation on Society to Disable Machines and Notify the Department

In a March 2019 banking audit report, the Department advised that notifying of a late banking six days after the event, was outside the expected timeframe.

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34.40    Gambling Advertising Code

The Advertising Standards Authority updated its Gambling Advertising Code in early 2019.  The code applies to both pay-to-gamble and free-to-gamble activities.  The code requires gambling advertisements to be socially responsible and truthful.

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37.05    The Pokerstars, Jackpot City and Spin Palace Examples

The Gambling Advertising Code was amended in 2019.  The updated code requires advertisements for free-to-play online gambling websites to clearly display a URL website address.

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28.33   Costs – NZCT - Counties Inn Example

In New Zealand Community Trust decision GC04/19, New Zealand Community Trust sought costs against the Department for delay in decision making (six months two weeks), failing to follow an existing High Court precedent, failing to follow its own precedents, and adopting an unreasonable interpretation of section 98.

 

The Commission gave serious consideration to awarding costs, but ultimately declined to do so.  The Commission declined to award costs despite the fact that it considered the Department’s position to be premised on a weak and contrived interpretation of the Act.  The Commission also commented that the Department showed a curious reluctance to apply a binding High Court decision (the Waikiwi Tavern decision).

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2.39      Grant Related Criminal Prosecutions

New example included.

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5.08      Venue Key Persons Receiving Grants

There is nothing in the Gambling Act 2003 which expressly and directly prohibits a society making a grant to one of its venue operators or any other venue key person. 

 

The Gambling (Venue Payments) Regulations 2016 prohibit a society making any other payment to a venue operator apart from the prescribed commission-based venue payment.  In late 2018, the Department indicated that the venue payment regulations prevent grants being made to a venue operator as the grant was a “payment”.  It is questionable whether the Department’s interpretation of the venue payment regulations is correct, given that the regulations were not intended to introduce any new requirement in relation to grants.

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16.09   Primary Activity and Alcohol Licences

In Re Kaiti Club Hotel Ltd [2018] NZARLA 225, the revenue breakdown was not considered detailed enough to assist in determining whether the venue was a tavern, due to the inability to apportion the revenue that did not come from gaming machine venue payments and TAB commission payments.  In this case, the Authority found that the premises were not a tavern, but primarily a gaming venue, based on the venue’s layout, the public perception, and the nature of the entertainment offered.

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34.13   Credit Betting, Cheques and the Use of Credit Cards

The section 15 prohibition is not, however, limited to gambling operators such as casinos, gaming societies, and venue operators.  Section 15(1) uses the term “person” and is therefore intended to be broader in scope.  Any person who is conducting gambling is captured by the prohibition.  In Xiao v Sun [2018] NZHC 536 [26 March 2018], the court noted that conducting gambling included “distributing the turnover of gambling” and held that a gambler who was gambling on behalf of another person, and sharing the gambling profits with that person, was caught by the prohibition on providing credit.

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35.01   Gambling Contracts Authorised by an Act are Enforceable

Gambling contracts authorised by or under the Gambling Act 2003 are enforceable: s 14(2) of the Gambling Act 2003.  Betting contracts authorised by or under the Racing Act 2003 are enforceable: s 64 of the Racing Act 2003.

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35.02   Illegal Contracts

Examples of illegal contracts include loans made by TAB agents to gamblers for the purpose of making a bet (credit betting) and claims for gaming machine winnings by an underage gambler or excluded gambler.

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22.03   Relocating 18 Machines to an Existing 9 Machine Site

It is possible to relocate a venue under section 97A to a site that already holds a gaming licence.  For example, it is possible to relocate an 18 machine licence to a site that already holds a 9 machine licence (effectively increasing the number of machines by 9).  All that is required is for the existing venue licence to be surrendered 24 hours before the new relocated licence is granted.  An example of an 18 machine licence being relocated to an existing 9 machine site, is The Flying Mullet Ale House (GMV 1445) relocation that took place on 13 June 2018.

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