As featured in the June edition of Bowler Magazine
Gaming Clubs have become adept at ensuring their gaming rooms can remain operational with minimal disruption during renovation works. However, there may be occasions when a gaming licensee needs to close down their gaming room for an extended period or permanently, for reasons such as the Club being demolished and rebuilt, relocated, or ceasing to offer gaming.
To close a gaming room, the licensee must apply to the Office of Liquor and Gaming Regulation (OLGR) for the suspension of the liquor and gaming machine licences, storage of gaming machines, and approval for alterations to the premises, including the new gaming room. The Licensed Monitoring Operator (LMO) will then assist with the de-commissioning and relocation of the gaming machines.
The jackpot monies collected from gaming players must be returned to customers as winnings. These monies are not the licensee’s funds, and as such, there are strict requirements regarding how they can be dealt with. While a Club may assume it can hold onto these monies during a major redevelopment and then re-apply them to the jackpot once the Club is ready to commence trading again, this is not permitted.
Once the jackpot system is de-commissioned, the LMO will calculate the exact amount of the accrued jackpot, and the gaming licensee is then responsible for dealing with these funds. The OLGR’s preference is that the monies be contributed to another jackpot system in the premises, which is not an option for most Clubs in these circumstances.
An alternative option is for the Club to return the funds to its customers via gaming-related promotional activities within the Club. OLGR approval is required for the proposed promotion, which must comply with the requirements for Category 4 Promotional Games.
Promotional games must have free entry, and the winners are determined entirely or partly by chance. Players may be required to buy goods or services to receive their free entry as long as the goods and services are sold at their usual market value price. The licensee must provide the OLGR with details regarding how the promotion will be undertaken, the prizes available, how people can enter, how the draw is conducted, and the timeframe for the promotion. In exceptional circumstances, the OLGR may approve the jackpot funds being donated to charity. Failing any of the above options, the monies can be forfeited to the OLGR and paid into the consolidated funds.
The preferred solution is for the monies to be returned to players. Therefore, if the Club doesn’t have another operating jackpot system, running a promotional activity should be conducted before ceasing trade. This may mean that the jackpot system needs to be de-commissioned before the premises cease trading to calculate the exact amount to be distributed.
Clubs are used to dealing with regulatory and compliance requirements as part of their operations, and ceasing to conduct gaming for a lengthy period or de-commissioning a jackpot system is no different. It is important for Clubs to properly plan such major works, but the ability to run a promotion and give cash prizes to patrons may be an opportunity that some Clubs can take advantage of as part of a major redevelopment or relocation.
If you have any questions on this topic or any other issues relating to a temporary or permanent Club closure, please call me on (07) 3224 0353.
