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Compliance Investigations and Audits Electronic Monitoring System (EMS) Fact Sheets (Gambling Act 2003) Gambling in Pubs and Clubs (Class 4) Info for Territorial Authorities |
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Authorised Purpose Guidelines for Societies and Clubs
The Gambling Act 2003 states that societies must conduct gambling to raise funds for "authorised purposes". The use of funds for unauthorised purposes can lead to prosecution or licence cancellation. General Policy
What is an authorised purpose?Authorised purposes under section 4 of the Gambling Act 2003 are:
Personal or commercial gainNobody should make a direct commercial profit from any authorised purpose grant.Grants to individuals should be avoided because they often constitute "personal gain" or a personal commercial profit. Sometimes there is a legitimate "incidental" commercial benefit as an indirect result of an authorised purpose payment (e.g. if producing an educational booklet were an authorised purpose, it would be legitimate to pay the printers as a necessary part of the production). Back to the top Charitable purposesCharity is helping people in need in the community. Typical recipients of charitable grants are the needy, for example, poor, sick, disabled or elderly people. Grants to further public health, religion and education may also be charitable.Some examples of charitable authorised purposes are:
Back to the top Education and trainingGrants for public education are usually an authorised purpose. Grants to educational bodies are a charitable purpose as long as the grant is for public rather than private purposes. In the case of individuals receiving grants it is especially important that the selection of recipients is done in an open and transparent process.Training which will result in commercial gain or career-oriented qualifications (e.g. training for tourism or professional sports) is unlikely to be an authorised purpose. A distinction is drawn between giving a grant for "general" education and training and giving a grant that will assist a person in their commercial and professional career. For example, a grant to a centre training the unemployed in general employment skills would be an authorised purpose while training "promising" athletes with the aim of creating professional sports people would not. Training for venue operators in gaming machine operations is not an authorised purpose but may be claimed as an expense if the society allows this. Back to the top Religious purposesThe advancement of religion is a charitable purpose. This applies to all religions and sects that fall under the criteria of religion at law being a "belief in a supernatural being, thing of principle and the acceptance of certain canons of conduct in order to give effect to that belief". Grants will often be for the provision and maintenance of grounds and facilities used by religious organisations.Back to the top Electioneering purposesGrants can be made for electioneering purposes. An electioneering purpose is defined in the Gambling Act 2003 as "the purpose of a group or individual standing for an election to public office". This definition spans national elections to elections for the board of a community trust. However, net proceeds from Class 4 gambling cannot be applied to electioneering purposes. This includes any net proceeds from gaming machines. Party political purposes other than those directly related to electioneering cannot be an authorised purpose. Back to the top Lobby Groups and Action GroupsGrants cannot be made to lobby groups or action/pressure groups where, for example, the purpose is to change a law, bring a court action, or influence a statutory decision making process. The definition of authorised purpose carries with it the notion of the purpose being beneficial to the community. Any consideration of whether one of these purposes is beneficial to a section of the community must also take into account the sections of the community to whom the challenge would be detrimental. The existence of lobby groups or action groups on any issue presupposes the existence of a contrary point of view. It may be possible to make grants to groups that are putting into effect decisions that have already been made for a community benefit. For example, help a group raise funds for the betterment of a designated bird sanctuary.Back to the top Grants for sportGrants must only be made for amateur sport. Most kinds of grants for amateur sports are permissible. You can pay for playing uniforms (but not dress uniforms), grounds maintenance, equipment, coaching - in short, anything that is necessary in order to play the sport. Grants should be made to the national organisation or an affiliated club, not to individuals.Professional sports are not authorised purposes, except where a professional is involved in coaching, training or development for junior sport. Grants could be made for short term coaching courses, not a full-time salary. To ensure that the sporting group has bona fide credentials, teams or individuals that benefit from grants should be affiliated to a recognised national organisation. Grants made to non-affiliated "social" sports clubs (such as corporate leagues) are not deemed to be an authorised purpose as membership in these teams is not open to the general public. The definition of "bona fide sport" that is approved by the department is a sporting activity, organisation or club that is:
Grants for a public sports facility (e.g. a stadium) are acceptable as long as the facility is not used primarily for professional sport. "Trade tournaments" or sporting events staged primarily for commercial publicity and/or the benefit of a select industry group, are not an authorised purpose. Back to the top Other community purposesThese must be non-commercial and benefit the community as a whole or a section of the community. A "section of the community" means a group that is open to public membership. A closed group where membership is discretionary is too limited to be considered a section of the community. For example, a closed group could comprise members of a family or a firm’s social club.Some examples of community authorised purposes are:
Racingand other semi-commercial sportsUnder the Gambling Act 2003, an Authorised Purpose for which a grant can be made includes "promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes".Racing has a particular status in New Zealand society, which is recognised and reinforced in the legislation. Authorised Purpose statements can allow for the proceeds from gambling to be spent on racing purposes. However, grants cannot be made to support the commercial wing of the racing industry, for example, the training and/or breeding of racehorses or payment of jockeys or drivers. Grants for ten-pin bowling should be purely for the assistance of members of the recognised amateur league and should not directly benefit any commercial ten-pin bowling centre (e.g. by the payment of lane fees). Similar rules apply to any sports facility run for commercial profit, such as billiard parlours and golf "country clubs". Back to the top Wages and salariesWages and salaries may be eligible for authorised purpose grants where the employing body has an entirely non-commercial community or charitable purpose and provided that the payment of a wage is necessary to achieve the authorised purpose. For example, the payment of an amateur sports coach for specific short-term coaching courses may be an authorised purpose.Wages and salaries of people involved in the gaming operation are not an authorised purpose. They should be claimed as an expense by the society. Back to the top Travel outside New ZealandGrants for New Zealand residents to travel outside New Zealand are allowable provided:
Back to the top VehiclesVehicles purchased with authorised purpose funds must be used for authorised purposes only and usually to assist in transporting needy people to hospital etc. Vehicles are not for private or commercial activities. Club "courtesy vans" used to ferry patrons home from social functions, regardless of need, are not an authorised purpose. For auditing purposes, logbooks of the use of the vehicle need to be maintained.Back to the top Social activitiesMost events which are social in nature (parties, balls, sports supporter's trips etc) are not authorised purposes. Provision and maintenance of facilities set up for provision of social activities are also not an authorised purpose.Purchase of alcohol, paying staff for bar work, and the maintenance or provision of bar facilities are not authorised purposes. Examples of social activities which are authorised purposes are:
Promotion and advertisingAdvertising is seldom an authorised purpose unless what is being promoted is entirely non-commercial and benefits the community.The kinds of advertising or promotions which may be acceptable authorised purposes are:
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Last updated: 06/05/2010 |
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