Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.

Overview of Bill

The object of this Bill is to amend the Gaming Machines Act 2001 (the principal Act)
as follows:

(a) to rationalise the scheme for the allocation and transfer of poker machine
entitlements and to reduce the overall State cap on the number of entitlements
allocated,

(b) to modify the scheme under which hotels and registered clubs can, in
accordance with the overall State cap on the number of gaming machines,
increase their gaming machine thresholds,

(c) to remove the limit on the maximum number of gaming machines that may be
kept on the premises of a particular registered club,

(d) to introduce new gambling harm minimisation measures (including
authorising the Director of Liquor and Gaming to require venues to move or
screen gaming machines that are located in a manner designed to attract the
attention of people outside the venue),

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(e) to introduce new provisions designed to protect the integrity of the gaming
machine industry (including offences relating to technicians who carry out
work on gaming machines),

(f) to remove the requirement for persons who act as gaming machine advisers to
hold a gaming-related licence,

(g) to make a number of other miscellaneous amendments of a consequential,
minor or machinery nature.

Outline of provisions

Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on a day or days to be
appointed by proclamation, except for certain amendments relating to the poker
machine entitlements retained by clubs under section 15B of the principal Act (these
amendments will commence, or are taken to have commenced, on 1 December
2008).

Clause 3 is a formal provision that gives effect to the amendments to the Gaming
Machines Act 2001 set out in Schedule 1.

Clause 4 amends section 153 of the Liquor Act 2007 so as to make a decision by the
Director of Liquor and Gaming under proposed section 44A of the Gaming Machines
Act 2001 (to be inserted by Schedule 1 [46] to the proposed Act) reviewable by the
Casino, Liquor and Gaming Control Authority (the Authority).

Clause 5 provides for the repeal of the proposed Act after all the amendments made
by the proposed Act have commenced. Once the amendments have commenced the
proposed Act will be spent and section 30 of the Interpretation Act 1987 provides
that the repeal of an amending Act does not affect the amendments made by that Act.

Schedule 1 Amendment of Gaming Machines Act
2001
Gaming machine thresholds for venues and local impact assessment
process
Schedule 1 [44] replaces the social impact assessment scheme under Division 1 of
Part 4 of the principal Act with a new scheme that provides for the setting by the
Authority of a gaming machine threshold for each venue. The gaming machine
threshold for a venue is similar to the existing concept of a SIA threshold (in that it
refers to the maximum number of gaming machines that may be authorised to be kept
in the venue). Under the new scheme, a venue may apply to the Authority to increase
its gaming machine threshold. The requirements under the proposed Division in
relation to a proposed increase will depend on the classification of the local
government area in which the venue is situated (the LGA classification is done by the
Authority) and the level of the increase applied for. In some cases, these requirements
will involve the provision of a local impact assessment (LIA) which must be

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approved by the Authority in order for the venue to get its increased threshold. If the
threshold for a venue is increased, the venue will have a limited period in which to
acquire poker machine entitlements to fill its threshold.

The new Division also contains special provision for clubs in new development areas
(namely, the club will only have to do a class 1 LIA, rather than a more stringent class
2 LIA, if it wants up to 150 gaming machines in a new development area and it will
only have to forfeit one in 6 poker machine entitlements (rather than one in 3) when
it acquires entitlements to meet its threshold). The new Division also restates the
existing provision relating to gaming machines in retail shopping centres. Under the
new provision, the gaming machine threshold for a venue in a shopping centre cannot
be increased, and if a venue is established in a shopping centre its threshold will be
zero.

The amendments made by Schedule 1 [2], [9], [20], [31] and [56] are consequential
on the introduction of the new gaming machine threshold scheme. Schedule 1 [8],
[57] and [58] are consequential on the provisions about retail shopping centres being
moved to the new Division 1 of Part 4.

Amendments relating to tradeable poker machine entitlement scheme
Schedule 1 [14] reduces the overall State cap on the number of gaming machines
from 104,000 to 99,000 (the new cap will refer to the number of poker machine
entitlements instead of actual machines). Provision is also made to further reduce the
State cap by regulation, as the number of poker machine entitlements will be
progressively reduced as a result of entitlements being forfeited when venues trade
them.

Schedule 1 [16] makes it clear that the scheme for allocating (or acquiring) poker
machine entitlements is subject to the overall State cap and that a gaming machine
cannot be kept in a venue unless it is authorised to be kept in the venue.

Schedule 1 [18] repeals a transitional provision relating to the reduction of poker
machine entitlements held by certain clubs. The clubs have paid to retain these
entitlements (which they would have otherwise been required to forfeit) and the
gaming machines to which the retained entitlements related have been removed from
the relevant premises under the existing provision.

Schedule 1 [19], [22], [23], [27], [30] and [32]–[37] make miscellaneous changes to
the way in which the tradeable poker machine entitlement scheme operates.

Schedule 1 [21] removes the provision for the allocation of “free” poker machine
entitlements to certain clubs (such as small or new clubs).

Schedule 1 [24] and [25] have the effect of repealing the amendments made to
section 19 of the principal Act by the Gaming Machines Amendment (Temporary
Freeze) Act 2008.

Schedule 1 [26] makes it clear that the gaming machine threshold for a venue is to
be decreased when the venue transfers any of its poker machine entitlements
(including those which are required to be forfeited as a result of a transfer).

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Schedule 1 [38], [40] and [41] modify the scheme relating to the approval to keep
hardship gaming machines. In particular, if a venue is notified by the Authority that
it has met all of the conditions relating to the approval to keep a hardship gaming
machine, the venue will have 12 months to acquire a poker machine entitlement for
the machine.

Amendments relating to maximum number of machines in clubs
Schedule 1 [15] removes the limit on the maximum number of gaming machines that
may be kept on the premises of a registered club (the current limit is 450 gaming
machines). As a consequence of the removal of the cap, provisions relating to
large-scale clubs (ie those clubs that had more than 450 gaming machines when the
cap was set in 2002), are also removed (see Schedule 1 [6], [17], [28] and [29]).

Schedule 1 [39] is consequential on the removal of those provisions.

Amendments relating to gambling harm minimisation measures
Schedule 1 [46] enables the Director of Liquor and Gaming to require venues to
move or screen gaming machines if they are located in a manner that is designed to
attract the attention of the public from outside the venue.

Schedule 1 [47] makes it clear that the requirement for a venue to provide problem
gambling counselling services only applies if the venue is authorised to keep gaming
machines.

Schedule 1 [48] requires a venue to provide an inspector with written evidence of the
arrangements that the venue is required to enter into for the provision of problem
gambling counselling services.

Schedule 1 [50] provides that if a prize won from playing gaming machines is issued
as a cheque, the prize winning cheque must be identified as a prize winning cheque
and must include the statement prescribed by the regulations for the purposes of
proposed section 47B. Schedule 1 [49] is a consequential amendment. Schedule
1 [50] also makes it an offence for a hotelier or club to permit a cash dispensing
facility (such as an ATM) to be located or installed in the venue if the facility
provides cash from a credit card account.

Schedule 1 [51] and [52] provide that venues can operate their own self-exclusion
schemes for patrons if the scheme is established and conducted in accordance with
the regulations.

Amendments relating to gaming-related licences and licensees
Schedule 1 [11], [53], [66], [71], [72], [87], [88] and [102] modify references
relating to the holder of a technician’s licence in the principal Act (the term
technician will refer to the holder of a technician’s licence instead of the latter term
being used throughout the Act).

Schedule 1 [89] removes the requirement that a person must be licensed to act as a
gaming machine adviser (ie a person who gives advice, or issues analyses and
reports, about poker machines). As a consequence, Schedule 1 [3], [5], [79], [81],

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[82], [84], [85], [90] and [99] amend provisions relating to gaming machine
advisers’ licences, and Schedule 1 [80] provides that the authority conferred by a
dealer’s licence will no longer include acting as a gaming machine adviser. The
amendment made by Schedule 1 [80] also makes it clear that a dealer’s licence is to
specify the premises (rather than places) on which the dealer is authorised to
manufacture and assemble gaming machines. Schedule 1 [83] is a consequential
amendment.

Schedule 1 [91] provides that conditions may be imposed by the Authority on a work
permit either when the permit is issued or at any later time.

Schedule 1 [92] modifies the information relating to interested persons that must be
disclosed by an applicant for a gaming-related licence.

Schedule 1 [93] provides that the costs of investigation by the Director or the
Commissioner of Police in relation to an application for a gaming-related licence are
payable by the applicant. A similar provision was included in the principal Act before
the Act was amended to replace the Licensing Court with the Authority as the body
responsible for granting gaming-related licences.

Schedule 1 [94] enables the holder of testing facility licence to apply to change the
premises specified in the licence.

Schedule 1 [95] removes a provision that allows the Authority to prevent dealers,
when manufacturing poker machines, from using parts that are not made in Australia.

Schedule 1 [96] provides that persons acting under the authority of a dealer’s licence
may be required by the Authority to alter gaming machines in venues.

Schedule 1 [97] removes a provision enabling an application to be made for a refund
of a licence fee when the licence is surrendered. The Authority already has a
discretion under section 111 of the principal Act to refund a licence fee when the
licence is surrendered or cancelled.

Schedule 1 [98] increases the penalty for certain offences under section 122 of the
principal Act (which relate to the provision of financial assistance by gaming-related
licensees) from 20 to 50 penalty units.

Schedule 1 [100] provides that the notification required to be given to the Authority
by technicians or sellers when they commence (or cease) work with a dealer must be
given in the manner approved by the Authority.

Miscellaneous amendments
Schedule 1 [1] replaces the objects of the principal Act. The new objects refer
specifically to the on-going reduction of poker machine numbers (which is achieved
through the tradeable poker machine entitlement scheme).

Schedule 1 [7] removes an obsolete provision in the definition of new hotel.

Schedule 1 [10] modifies the definition of subsidiary equipment so that it refers
specifically to things that affect the playing of a gaming machine or the meters of a
gaming machine.

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Schedule 1 [12] requires the Authority to be notified when poker machines are kept
or operated for non-gambling purposes and Schedule 1 [13] allows gaming machines
to be operated at trade shows provided they are not used for gambling purposes.

Schedule 1 [42] is consequential on other amendments made by the proposed Act in
relation to the various gaming machine entitlements that may be held by venues.

Schedule 1 [43] enables Liquor Act poker machine permits (which were issued
under section 182C of the Liquor Act 1982 before the principal Act commenced) to
be retained for a limited period following the cancellation or surrender of the relevant
hotel licence.

Schedule 1 [45] makes it clear that the offence of publishing gaming machine
advertising does not apply if the advertising material consists of internal promotional
material that has been removed from the venue concerned by a patron for their own
personal use.

Schedule 1 [54] enables the Authority to cancel the authorisation of a venue to keep
gaming machines if the venue has failed to comply with any conditions of the
Authority’s approval of a LIA under proposed Division 1 of Part 4 (as inserted by
Schedule 1 [44]).

Schedule 1 [55], [62] and [75] provide that certain functions of the Director of
Liquor and Gaming in relation to gaming machines are to be exercised instead by the
Authority.

Schedule 1 [59]–[61] modify provisions relating to the limit on the number of
multi-terminal gaming machines that may be kept by a registered club. In particular,
a club will be given 5 years to reduce its number of MTGMs to 15% of its number of
poker machine entitlements.

Schedule 1 [63] extends the existing offence of possessing a gaming machine that
has not been approved so that it also applies to the supply, sale or installation of an
unapproved gaming machine. Schedule 1 [64] provides that the offence of
possessing an unapproved gaming machine does not apply in relation to a gaming
machine that is kept on a trial basis under section 66 of the principal Act.

Schedule 1 [65] makes it clear that the offence of supplying an unapproved gaming
machine component extends to the sale of the unapproved component.

Schedule 1 [67], [68], [70], [73], [74] and [86] modify existing offence provisions
relating to gaming machines.

Schedule 1 [69] creates new offences relating to work carried out by technicians.

Schedule 1 [76] creates a new offence of falsely claiming a prize from the playing of
a gaming machine.

Schedule 1 [77] consolidates existing offences relating to a person fraudulently
gaining an advantage during the design, manufacture, assembly, maintenance or
repair of a gaming machine. Schedule 1 [78] is a consequential amendment.

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Schedule 1 [101] makes it clear that a gaming machine is connected to an authorised
CMS for the purposes of Part 9 of the principal Act if information in respect of the
gaming machine is provided to the authorised CMS in accordance with arrangements
approved by the Minister.

Schedule 1 [103] creates a new offence of permitting a gaming machine that is part
of a linked gaming system to operate in stand alone mode when the linked gaming
system is not operating. The offence will not apply in such circumstances as may be
approved by the Minister. If the gaming machine itself ceases to operate as part of
the linked gaming system, it will also be an offence to permit the gaming machine to
be used for the purposes of gambling during that time.

Schedule 1 [104] requires technicians to ensure that all the components of an
authorised linked gaming system (including the actual gaming machines) are
properly connected to the system after the technician does any work on the system in
a venue.

Schedule 1 [105]–[107] specify additional matters in respect of which an allegation
in any proceedings is taken to have been proved.

Schedule 1 [108] re-establishes the Community Development Fund. The Fund is
currently established under section 15B of the principal Act, but will have other
sources of money paid into it as a consequence of the proposed Act. Schedule 1 [4]
and [113] are consequential amendments.

Schedule 1 [109] enables the Minister to give directions to the Authority in relation
to certain functions of the Authority.

Schedule 1 [110] enables information acquired under the principal Act to be
disclosed to the NSW Police Force or the police force of any other Australian
jurisdiction.

Schedule 1 [111], [112] and [114] enable regulations to be made with respect to the
operation of temporary self-exclusion schemes for hotel and club patrons, the
operation of authorised linked gaming systems and the allocation and transfer of
poker machine entitlements.

Schedule 1 [115] enables regulations of a savings or transitional nature to be made
as a consequence of the proposed Act.

Schedule 1 [116] includes savings and transitional provisions as a consequence of
the proposed Act. In particular, special provision is made in respect of existing SIA
thresholds and pending SIA applications that have been provided before the
commencement of the proposed Act.

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 

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