Services › Casino and Non-Casino Gaming › Gambling in Pubs and Clubs (Class 4)

Gaming machines in pubs and clubs (i.e. outside a casino) represent 'Class 4' gambling, which the Gambling Act 2003 classifies as high-risk, high-turnover gambling. Class 4 gambling may only be conducted by a corporate society and only to raise money for an authorised (e.g. community and non-commercial) purpose.

• Licensing Criteria
• Authorised Purposes
• Current Regulations
• Class 4 Game Rules
• Class 4 Gambling Forms
• Venue Expenses
• Venue Transfers
• The Role of Territorial Authorities
• Gambling Sector Consultation
• Compliance, Investigations and Audits
• Infringement Notices
• More Information

What's new

Gambling Compliance Audits

Advice for Christchurch earthquake relief fundraising 10/03/2011
The Department has established a group of officials to help people wanting to raise funds for Christchurch earthquake relief through schemes that may involve gambling.

Society grants 14/03/2011
The Department has been asked how gaming machine trusts can donate to Christchurch earthquake relief within the rules of the Gambling Act 2003.

Integrated Gambling Platform (IGP)
The IGP is an integrated electronic solution to help improve regulation of gambling in New Zealand.

Revised Policy on Misuse (Late Banking) of Gaming Machine Profits (GMP)
The Department's policy in relation to the late banking of GMP by Class 4 venues came into effect on 12 October 2009 and was revised in November 2010.

Key Messages from The Southern Trust and The Trusts Charitable Foundation Gambling Commission Appeals (PDF, 111K)*
The Department's expectations in relation to actual, reasonable and necessary costs; minimising costs and maximising net proceeds; venue developments and enhancements; and a number of other issues following recent Gambling Commission appeals.

Player Information Displays (PIDs) Notice (PDF, 27K)*
Reducing gaming machine numbers, and territorial authority consents.

Financial Viability Guidelines (PDF, 184k)*
This paper sets out the Department's expectations in determining whether a Class 4 applicant's proposed gambling operation is "financially viable".

Licensing Criteria

The Gambling Act 2003 aims to control the growth of gambling. There are strict licensing criteria for organisations wanting to run gaming machines and for the venues at which those machines are operated.

The licensing criteria aim to:

• Prevent and minimise harm caused by gambling, including problem gambling
• Facilitate responsible gambling
• Ensure the integrity and fairness of games
• Ensure that money from gaming machines benefits the community
• Ensure that gaming machines operate at suitable venues
• Limit the opportunity for crime and dishonesty associated with gaming machines
• Ensure that gaming machines are run by responsible, accountable societies.

Licence Conditions

Operator's licences and venue licences issued or renewed are subject to licence conditions issued under the Gambling Act 2003. These conditions accompany and form part of the licence. Any corporate society must comply with the requirements set out in the licence conditions. Non-compliance will put the society's licence at risk.

The following Fact Sheets explain more about Class 4 licensing: Fact Sheets 6, 8, 11 and 23.

Financial Viability

This paper sets out the expectations of the Department in determining whether a Class 4 applicant’s proposed gambling operation is "financially viable":

• Financial Viability Guidelines (PDF, 184K)*

Authorised Purposes

Class 4 corporate societies that are licensed to operate gaming machines must apply the net proceeds of the gaming operation to authorised purposes.

Authorised purposes are:

• charitable purposes
• non-commercial purposes that have community benefits
• promoting, controlling and conducting race meetings.

A society must state what its regulations are, and the statement will be included on its licence. The use of funds for unauthorised purposes can lead to prosecution or licence cancellation.

• Authorised Purpose Guidelines for Societies and Clubs

Current Regulations

Regulations have been made under the Gambling Act 2003 to help achieve the objectives of the Act. Regulations apply to individuals and organisations that are authorised to operate gambling.

• Current Regulations

The following questions and answers have been collated to help answer queries from gambling operators about recent legislative and regulatory changes:

• Frequently Asked Questions (PDF, 78K)*

See also:

• Internal Policy Guidelines for Harm Prevention, Harm Minimisation and Responsible Gambling
• Harm Minimisation Venue Assessment Checklist - Inspectors may use these guidelines for evaluating compliance with current Harm Prevention and Minimisation requirements for Class 4 venues.
• Player Information Displays (PIDs) Notice (PDF, 27K)* - Player Information Displays (PIDs), reducing gaming machine numbers, and territorial authority consents.
• Exclusion Order Guidelines - Information about issuing exclusion orders.
• Exclusion Order Form - Use this form to exclude patrons from your venue.
• Procedure for Club Mergers (PDF, 83K)* - Guide to procedure for club mergers under section 95 of the Gambling Act 2003

Class 4 Game Rules

The Gambling Act (Class 4) Game Rules govern the playing and participation in Class 4 gambling that utilises gaming machines outside of casinos and the systems, processes, information and documentation associated with particular games.

Societies must comply with these Game Rules from 29 June 2006:

• Current Gambling Act (Class 4) Game Rules 2006 (PDF, 1.7M)*

Historical Reference

The following rules were in place prior to 29 June 2006 (use for historical reference only): Gambling Act (Class 4) Game Rules 2004 (PDF, 200K)*.

The Gaming Machine Operations Manual (Blue Book) was replaced by the Class 4 Game Rules 2004.

Venue Expenses

• Key Messages Following Gambling Commission Appeals
• Class 4 Venue Costs Guidelines and Frequently Asked Questions
• Class 4 Venue Costs Schedule
• Class 4 Venue Labour Costs
• Record Keeping for Gaming Operations
• Conference Expenses
• Gazette Notice for Venue Expenses
• Development of Venue Expenses Gazette Notice

Key Messages Following Gambling Commission Appeals

The following letter clarifies the Department's expectations in relation to actual, reasonable and necessary costs; minimising costs and maximising net proceeds; venue developments and enhancements; and a number of other issues following recent Gambling Commission appeals.

• Key Messages from The Southern Trust and The Trusts Charitable Foundation Gambling Commission Appeals 5 July 2010 (PDF, 111K)*

Class 4 Venue Costs Guidelines and Frequently Asked Questions

The Department amended the Reference Paper: Guidelines on Venue Costs Under the Gambling Act 2003 (PDF, 64K)*. The Reference Paper explains the New Zealand Gazette Notice and how to complete the venue costs schedule below.

Societies and venues can also access a Frequently Asked Questions (PDF, 40K)* document on Class 4 venue costs.

Class 4 Venue Costs Schedule

The Department has completed a series of consultations with a view to achieving consistency in the Class 4 sector on the treatment of Class 4 venue costs.

As a result of that consultation, the Department has published a standardised Class 4 Venue Costs Schedule for use by all Class 4 societies.

This must be used by all societies when assessing the venue costs associated with a Class 4 gambling operation. The Schedule is in Excel format with formulas added and can be downloaded and used directly. It is set to 15% GST. Alternatively, you can print it out and complete it manually.

To achieve consistency and provide data to analyse the Gazette Notice, the Department asked all societies to resubmit all Class 4 Venue Cost Schedules by 30 June 2010. This document explains the process for resubmitting venue cost schedules:

• Resubmission of Class 4 Venue Cost Schedules (PDF, 32K)*

Class 4 Venue Labour Costs

The labour costs associated with a Class 4 gambling operation make up a significant portion of the costs that can be claimed under the Gazette Notice.

The Department undertook a project to benchmark Class 4 venue labour costs in line with the recommendations of the Venue Expenses Working Party. This project looked at the nature of Class 4 venue labour activities and provided data on the timeframes associated with conducting those activities.

• Class 4 Venue Labour Costs Benchmarking Report (PDF, 183K)*.

The Charity Gaming Association also commissioned a survey to examine the timeframes associated with Class 4 gambling. Societies and venues can use these reports to assist in setting labour task timeframes. Note: Much of the data relates to 18 machine venues.

• Colmar Brunton Survey (PDF, 1.9M)*

Record Keeping for Gaming Operations

The Department has created the example Record Keeping for Gaming Operations (Monthly) Spreadsheet.

All clubs are encouraged to use the spreadsheet, which will help to:

• easily identify funds available for Authorised Purposes each month
• monitor the percentage of distributed Authorised Purposes on a monthly basis
• understand the difference between Authorised Purposes and the Direct Costs of Gaming
• avoid over-distribution of Authorised Purposes
• complete the renewal application.

Please update the spreadsheet with data from the start of your financial year and follow it from now on. You can add more Authorised Purposes that correspond to the club's gaming licence. Total boxes and Authorised Purpose percentages will be calculated automatically if the formula stays the same.

If you have any questions about using the spreadsheet, please contact Gambling Inspector Anna Panchenko - direct dial (04) 494 5764 or email anna.panchenko@dia.govt.nz

Conference Expenses

All societies should consider these guidelines carefully before deciding whether to arrange a conference:

• Guidelines for Society Conference Expenses (PDF, 19K)*

The basic principle that underlies these guidelines is that costs must be minimised and funds for the community must be maximised.

Note: These Guidelines are currently under review in light of the Gambling Commission's comments in its decision in the appeal by The Trusts Charitable Foundation (TTCF) against the Secretary's suspension of its Class 4 operator's licence.

Societies should read the existing guidelines in light of the Gambling Commission's decision and should refer to the Key Messages from the Southern Trust (GC11/10) letter sent to societies on 5 July 2010.

Gazette Notice for Venue Expenses

Section 116 allows the Secretary to issue notices to limit or exclude Class 4 venue costs.

The previous Gazette notice appearing in the 2 September 2004 issue of the Gazette has been replaced by a notice appearing in the 17 July 2008 issue. This notice clarifies the position of GST in relation to venue expenses (effective 18 July 2008).

• Gazette Notice: Limits and Exclusions on Class 4 Venue Costs Notice (17 July 2008) (PDF, 18K)*
• GST Gazette Notice Amendment - Frequently Asked Questions (PDF, 14K)*

A letter to all societies sets out the Department's expectations for complying with the new notice.

• Letter to Societies (18 July 2008) (PDF, 50K)*

Development of Venue Expenses Gazette Notice

A consultation document on venue expenses was sent to all societies and made available on the Department's website on 22 March 2004:

• Site Payments Consultation (PDF, 232K)*

As a result of the consultation, an independent accounting firm was commissioned to assess the factors that influence venue expenses and to benchmark actual, reasonable and necessary costs that venues incur for hosting gaming machines. A copy of the accounting firm's report can be found here:

• Gaming Machine Report (PDF, 2M)* - Commissioned by the Department of Internal Affairs (19 July 2004)

Disclaimer: This report was commissioned from independent consultants to assist the Department in developing policy on the costs associated with operating gaming machines at Class 4 venues. It represents the views of the consultants and is not a statement of Departmental policy.

Most of the limits and exclusions came into effect on 2 December 2004. The remaining limit came into effect on 2 December 2005. Click here for a copy of the original Gazette notice:

• Gazette Notice: Limits and Exclusions on Class 4 Venue Costs Notice (2 September 2004) (PDF, 81K)*

A letter and a venue expenses form was sent to all corporate societies with venue agreements on 2 September 2004. The letter explains the intent of the original Gazette notice and the requirements on societies that result from the notice:

• Letter to Societies (2 September 2004) (PDF, 144K)*

Venue Transfers

The process for transferring gaming machines from one society to another changed with the implementation of the Electronic Monitoring System (EMS). View this document for step-by-step instructions on the new process:

• Venue Transfer Process (PDF, 21K)*

The Role of Territorial Authorities

The Gambling Act allows for the growth of gambling to be controlled through territorial authorities.

Territorial authorities have introduced policies that can limit gaming machine numbers and they must agree to where gaming machines are placed in their districts. In this way the community can have input into gaming machine numbers and locations.

A corporate society must apply for territorial consent before it establishes new gaming machine venues and increases the number of machines that may be operated at existing venues.

• Information about Territorial Authorities

More Information

• Gambits Magazine - Gambling Compliance magazine for gaming machine societies and site operators
• Gambling Statistics - Gaming machine and expenditure statistics at quarterly intervals
• Gambling Press Releases
• Funding for Community Groups
• Sport, Gambling and Grants
• Contact the Gambling Compliance Group

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Unable to download or access our files? Contact the Gambling Compliance Group and request printed copies.