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15 April 2016

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Loss of GMP in exceptional circumstances – who bears the loss?

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.

Gambling Host Responsibility Guide for Venue Staff – updated information

We would like to let you know about an update to a short section in one of the Gamble Host Pack resources – Gambling Host Responsibility Guide for Venue Staff – that relates to breaches of exclusion order requirements. 

‘Any operator, manager or person acting on their behalf that knowingly fails to exclude a self-identified problem gambling or knowingly fails to remove an excluded person may be convicted and fined up to $10,000’.

Recent amendments in the Gambling Act has meant that the sentence above, found on page 17 of the guide under the heading ‘Fines’, is now out of date. The recent amendments have altered the onus of proof and changed the fine from a $10,000 to a $5,000 maximum. We would encourage you to ensure venues are aware of these changes. 

We apologise that this resource wasn’t updated before the printing of the Gamble Host Packs, however the online Gamble Host Responsibility Guide for Venue Staff (PDF, 249KB)* has been changed to reflect this.

Section 312 amendment

The Gambling Amendment Act 2015 revised section 312 of the Gambling Act, and states that a venue manager or person acting on their behalf commits an offence if they:

  • allow a person who is subject to an exclusion order under section 310(1) to enter the gambling area of a class 4 venue or casino venue; or
  • allow a person who is subject to an exclusion order (b) fail to remove a person who has entered those areas —

This new wording changes the onus of proof for a charge relating to an exclusion order. Previously venue personnel committed an offence if they allowed an excluded gambler to enter the gambling area of a venue, but only if they knowingly allowed this to happen. The amendments in the Act now mean that an offence is committed if an excluded person enters the gambling area of a venue. In this case there is ‘an absence of fault defence’ for situations where the venue manager, or person acting on their behalf, has reasonable grounds to believe there were effective procedures in place to prevent excluded gamblers from entering the venue and took all reasonable steps to ensure that the procedures were complied with. 

The penalty for breaches of this section by venue managers, or person acting on their behalf, has also changed from a maximum of $10,000 to a maximum of $5,000. 

Read more about the new wording for section 312 of the Gambling Act (found in the Harm Prevention and Minimisation section under the heading New wording for offences).

Submissions called for on proposed changes to the Racing Act

Racing Minister, Nathan Guy, today announced the release of the discussion document, Proposals to amend the Racing Act 2003, and is calling for submissions over the next six weeks.

Issues on which views are being sought include giving the New Zealand Racing Board more betting options, and introducing levies for offshore gambling operators taking bets from New Zealand or offering bets on New Zealand racing and sport.

Read the Minister’s media release: View sought on proposed Racing Act changes.

Read the discussion document: Proposals to amend the Racing Act 2003.

The proposals in the discussion document have been informed by the Report of the Offshore Racing and Sports Betting Working Group (PDF, 936KB).

If you wish to make a submission, please email it to offshorebetting@dia.govt.nz. Submissions close on Friday 27 May 2016.