We have recently been asked for guidance about how to manage the loss of Gaming Machine Proceeds (GMP) following an uncontrolled event at a venue such as an armed robbery, theft or natural disaster. From January 2013 to January 2015 there were 21 instances of theft at Class 4 venues that resulted in the late banking of GMP.
Most venues insure against GMP losses, an allowable expense in the venue costs’ schedule. Although the Gambling Act is silent on GMP losses, Rule 11 of the new Class 4 Game Rules 2016, (which came into effect on 7 March), retains the requirement that all cash removed from gaming machines is the responsibility of the venue operator until it is banked.
The Department recently introduced a new policy which confirms that while the venue manager is responsible for ensuring all GMP is banked into the society’s account, there are some exceptional circumstances where we may agree to waive the requirement for the venue operator to bank:
The portion of the insurance excess that relates specifically to GMP or
Some or all of the outstanding GMP (where the GMP has not been insured but legitimate attempts were made to do so).
Examples of events beyond a venue operator’s control might include armed robbery, burglary or theft of GMP where all reasonable precautions were taken, or a natural disaster such as earthquake or fire.
For the request to waive GMP to be considered we would need to be satisfied that there were strong security and cash-handling processes in place at the venue to mitigate risk of GMP loss, and for the terms in the venue agreement to have been complied with.
As Rule 11 of the Class 4 Game Rules provides that the venue operator is responsible for GMP until it is banked, the onus is on the venue operator to convince us that exceptional circumstances exist.
Situations where a venue operator might have to bear the loss might be a theft due to lax security or cash-handling procedures, legitimate attempts were not made to obtain adequate insurance cover, failing to comply with venue agreement requirements or unreasonably long GMP banking intervals.
Read the guide: Treatment of Class 4 gambling profits where exceptional circumstances have prevented its banking.
Our previous position was that the venue operator is responsible for meeting all GMP losses no matter the circumstances.
However, we recognised that this could lead to venue operators suffering significant hardship following events out of their control. There is also a risk that venue staff may jeopardise their safety by intervening during an armed robbery if they believe the taking of GMP will result in financial hardship.
Societies can contact their Departmental liaison for more information if they believe there has been a late banking with exceptional circumstances that may meet these criteria.