Gaming Machines Amendment
Bill 2004

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

Overview of Bill

The object of this Bill is to make the necessary amendments to the Gaming Machines
Act 2001 (the Principal Act) in consequence of a requirement, made in connection
with the acquisition of TAB Limited (TAB) by Tabcorp Holdings Limited, that TAB
divest itself of certain exclusive licences that it holds under the Principal Act. That
Act, as amended by this Bill, will no longer provide that TAB is entitled to those
exclusive licences and will permit the transfer of the licences (other than one form of
licence that is abolished by the Bill).

The Bill also:

(a) removes the requirements for the holders of certain of the licences concerned
to have in place, and give effect to, certain commercial arrangements with the
racing industry, and

(b) repeals the provisions dealing with investment licences under the Principal
Act, and

(c) repeals and re-enacts a provision to reflect the fact that links licences under the
Principal Act are held, not by individual hoteliers and registered clubs, but by
a single licensee, and

(d) inserts savings and transitional provisions.

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.

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

Schedule 1 Amendments
Schedule 1 [6] repeals and re-enacts section 137 of the Principal Act. Currently, that
section provides that TAB is entitled to an exclusive licence, for the period up to 1
December 2016, to operate a centralised monitoring system for gaming machines in
hotels and clubs (a CMS licence).

The section as re-enacted preserves the exclusive CMS licence granted to TAB for
that period but it does not name the licensee. It provides, instead, for the transfer of
the exclusive licence with the written consent of the Minister and subject to such
terms and conditions as the Minister may determine. Schedule 1 [5] makes a
consequential amendment.

Schedule 1 [4] repeals section 136 (4) and (5) of the Principal Act. Those subsections
provide that a CMS licence is subject to a condition that the licensee must have in
place, and must give effect to, certain commercial arrangements with the racing
industry.

Schedule 1 [7] and [8] repeal and re-enact sections 147 and 152, respectively, of the
Principal Act. Those sections are concerned with linked gaming systems—that is,
systems in which two or more specially approved gaming machines are linked
electronically to contribute a percentage of the money wagered on the gaming
machines to a separate jackpot pool.

Currently, section 147 provides that TAB is entitled to an exclusive licence (an
inter-hotel links licence), for the period up to 17 October 2017 (effectively), to
operate a linked inter-hotel gaming system—that is, a linked gaming system that
operates in a hotel but includes specially approved gaming machines that are kept in
other hotels. Section 152 is to the same effect in relation to registered clubs, entitling
TAB to an exclusive inter-club links licence for the same period.

The sections as re-enacted preserve the exclusive links licences granted to TAB for
that period but they do not name the licensee. They provide, instead, for the transfer
of the exclusive licences with the written consent of the Minister and subject to such
terms and conditions as the Minister may determine.

Schedule 1 [9] repeals section 153 (3) and (4) of the Principal Act. Those subsections
provide that a links licence is subject to a condition that the licensee must have in
place, and must give effect to, certain commercial arrangements with the racing
industry.

Schedule 1 [14] repeals and re-enacts section 170 (2) of the Principal Act. Section
170 (1) provides that a licence does not confer any right of property and is (among
other things) incapable of being assigned. Currently, section 170 (2) makes it clear
that section 170 (1) does not prevent certain activities of a holder of an investment
licence. (The repeal of the subsection is consequent on the abolition of investment
licences by Schedule 1 [10].) As re-enacted, section 170 (2) over-rides section 170
(1) to the extent necessary to permit the transfers of the exclusive licences.

Schedule 1 [10] repeals Part 11 (Investment licences) of the Principal Act. That Part
provides for the granting of licences that authorise the sale or supply of gaming
machines to hotels and the sharing in the profits from the operation of those
machines. (Section 73 of the Principal Act prohibits hoteliers and registered clubs
from sharing those profits otherwise than as provided for in Part 11 or as part of a
linked gaming system.) Schedule 1 [1] (in part), [2], [11]–[13], [15] and [16] make
consequential amendments.

Schedule 1 [17] enables regulations containing savings and transitional provisions to
be made as a consequence of the enactment of the proposed Act.

Schedule 1 [18] inserts a new Part into the Schedule of savings and transitional
provisions in the Principal Act. That Part:

(a) provides that any direct debit arrangements in force for the collection of the
monitoring fee payable to the holder of a CMS licence, or for the collection of
amounts payable to the holder of a links licence in connection with the
operation of an authorised linked gaming system, continue to operate for the
benefit of any persons to whom the relevant licences are transferred, and

(b) prevents the withholding of any consents required to permit the assignment or
novation of contracts necessary for the continued operation of the authorised
centralised monitoring system or authorised linked gaming system from the
holders of the licences to the persons to whom the relevant licences are
transferred, and

(c) cancels the investment licence held by TAB, and

(d) provides for the completion of contracts and other arrangements entered into
pursuant to the investment licence.

Schedule 1 [1] (in part) repeals the definition of TAB in consequence of the removal
of references to TAB from the Principal Act (other than in the Schedule of savings
and transitional provisions).

Schedule 1 [3] repeals and re-enacts section 73 (2) of the Principal Act so as to
substitute the generic term “holder of the relevant links licence” for certain
references to hoteliers and registered clubs (because the licences are currently held
by a single licensee and not by individual hoteliers and registered clubs).

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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