5 Gaming Machines
5.1 Definition of a Gaming Machine
The Gambling Act 2005 draws the definition of a gaming machine very widely, and deliberately so. It is intended to ensure that any equipment used to gamble is classified as a gaming machine unless it is covered by one of the exceptions specified in the Act. Thus, Section 235(1) defines a gaming machine as:
“a machine which is designed or adapted for use by individuals to gamble (whether or not it can be used for other purposes)”.
Section 235(2) then specifies certain types of equipment or machine which are excluded from the general definition of a gaming machine
a) One of these specific exclusions is equipment designed or adapted for the playing of bingo also known as bingo machines, video bingo terminals, VBTs etc., provided it is used in accordance with a condition imposed by the Gambling Commission relating to the specifications for such equipment.
b) Thus, equipment used by players to play any form of bingo in a licensed bingo club is not classed as a gaming machine and is therefore not subject to any of the rules governing the use and operation of gaming machines, although it is, of course, subject to any rules governing the use of bingo equipment.
Another specific exclusion is that a dual-use or domestic computer is not a gaming machine by reason only of the fact that it can be used to participate in remote gambling. Thus, Regulations have been produced to define a “domestic computer” and a “dual-use computer” with the intention of exempting internet-capable terminals and home computer equipment, which are not dedicated or specifically configured for gambling activities, from the definition of a gaming machine.
The Gambling Commission has issued ‘Gaming Machine Technical Standards’ which are regularly reviewed. This standard sets out the minimum standards expected by the Gambling Commission. A link to the most recent version will be found in the Resource Centre.
5.2 Categories of Gaming Machines
Regulations made under the authority of Section 236 of the Gambling Act define the four main classes of gaming machine, known as Categories A, B, C and D, and the five sub-divisions of Category B, known as sub-categories B1, B2, B3, B3A and B4. These regulations also specify into which type of premises these various sub-categories may be installed.
a) Category A gaming machines are defined as any machines which are not in Category B, C or D. There are no limits on the levels of stake or prize for these machines, and they are not permitted in any premises licensed for gaming.
b) Category B1 gaming machines may be installed only in casinos.
c) Category B2 gaming machines may be installed only in casinos and licensed betting shops.
d) Category B3 gaming machines may be installed in casinos, licensed betting shops, licensed bingo clubs and adult gaming centres.
e) Category B3A gaming machines are defined as machines which enable a player to participate only in a lottery. These machines are allowed only in a members’ club or miner’s welfare institute and must form part of the overall machine entitlement for the type of premises.
f) Category B4 gaming machines may be installed in casinos, licensed betting shops, licensed bingo clubs, adult gaming centres and members clubs
g) Category C gaming machines may be installed in casinos, licensed bingo clubs, adult gaming centres and family entertainment centres.
h) Category D gaming machines may be installed in casinos, licensed bingo clubs, adult gaming centres and family entertainment centres.
Stakes and prizes are subject to review by the Secretary of State. The stake and prize limits are set out in the ‘Monetary Limits’ document, which is available on the Gambling Commission website.
5.3 Entitlement to Gaming Machines
Apart from some specific exceptions, none of which are relevant to licensed bingo premises, a gaming machine can only be made available for use by players on the authority of an Operating Licence in conjunction with the relevant gambling premises licence.
The type and number of gaming machines that can be made available for use in gambling premises depends on the nature of the premises. Section 172 (7) of the Act, as modified by Regulations made under Section 236, sets out the gaming machine entitlement according to the type of Premises Licence.
The entitlement granted by a Bingo Premises Licence is as follows:
a) up to 20% of the total machine estate can be category B3 machines; and
b) any number of Category C gaming machines; and
c) any number of Category D gaming machines.
5.4 Grandfathering Rights
Any AGC or bingo premises whose licence was granted before The Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (see 5.20) which came in to force on 13th July 2011 is permitted to either:
a) offer a number of category B gaming machines not exceeding 20% of the total number of gaming machines available for use on the premises or;
b) retain their existing entitlement of category B gaming machines that is four for AGC premises and eight for bingo premises
These rights are not time limited
Where a licence has been issued on or after 13th July 2011 the number of machines permitted is as described in section B5.4.1.a and B5.4.1.b until 1st April 2014. From 1st April 2014 the premises must comply with the 20% entitlement only.
Although no more than 20% of the total gaming machine estate may be drawn from Categories B3 and B4 may be made available for use, more than the permitted number of machines may be physically located on a premises. This is provided that the operator has a robust system in place that ensures that no more than the permitted number are ‘available for use’ at any one time. The Gambling Commission has issued ‘advice regarding when a machine is considered available for use’ broadly speaking this is if a person is ‘able to play it’. An example of an appropriate system for control of this situation could be where the power supply for these machines is controlled by the operator and is inaccessible to a player, so that an operator has effective control over the use of these machines.
5.5 Gaming Machines on EBTs
If an EBT offers gaming machine content in addition to bingo content it is considered a gaming machine for the purpose of primary gambling activity (if it is available for use) and would count towards the number of gaming machines. Correspondingly, that terminal would not count towards the offering of bingo for primary gambling activity purposes. Any EBTs that do not offer gaming machine content would not count towards the number of gaming machines.
5.6 Primary Gambling Activity
The Gambling Commission’s Licence Conditions and Codes of Practice (LCCP) contains conditions and codes concerning primary gambling activity.
a) For bingo premises licences granted on or after 13th July 2011 where bingo is exclusively offered by electronic means, this will mean from 1st April 2014 in order to operate eight category B machines and operator must operate 32 other gaming machines.
b) Gaming machines may be made available for use in licensed bingo premises only where there are also substantive facilities for non-remote bingo, provided in reliance on this licence, available in the premises.
c) Skill with Prizes (SWP) do not contribute to the number of gaming machines
d) Category, B3, B4, C and D combined count towards the 20% entitlement
e) The number of category B machines is rounded down for the purpose of the 20% calculation. For example an operator with 39 machines (including Category B machines) would only be able to offer 7 category B machines. An operator with 40 machines could offer 8 category B machines.
5.7 Conditions for Use of Gaming Machines
The conditions governing the use of gaming machines are set out in Regulations made under Section 240 of the Act. These Regulations cover a range of issues and are very complicated, reflecting the complexity of establishing a comprehensive framework of regulation for gaming machines that satisfies the licensing objectives of the Act whilst recognising the practical difficulties of the industry in meeting new technical standards. These Regulations are set out in The Gaming Machine (Circumstances of Use) Regulations 2007 and links are available at the end of this section.
5.8 Machine Display
Machines should be sourced from a licensed manufacturer who will give guidance about the display of information on a machine.
The following information must be displayed on a gaming machine at all times so as to be readily visible to a player:
a) The contact details of a helpline to assist those who are having, or may be affected by, gambling-related problems.
b) A statement that the gaming machine is not to be used by a person under 18 years of age; but note that this notice is not required on a Category D machine.
c) The rate of percentage payout of the machine, or a notice indicating where such information can be found that is readily accessible by a player; this notice also need not be displayed on Category D gaming machines where there is no mechanism for recording the aggregate stakes and prizes, but instead there should be a notice stating that the machine provides facilities for gambling.
d) The information contained in the above notices may take the form of any combination of letters, numbers or symbols.
e) A notice specifying the category or sub-category of the gaming machine must be affixed to the machine. This notice need not be readily visible to a player but it must be located in a position where it can be seen by a person inspecting the machine.
5.9 Methods of Payment
Payments to play gaming machines may be made by the insertion into the machines of money or money’s worth (e.g. tokens, smartcards or tickets).
It is illegal for gaming machines to accept payment by credit card or debit card.
It is also illegal for a proprietor to allow a player to use a credit card to purchase non-cash methods of payment to play a gaming machine.
A gaming machine must not be made available for play if the charge for playing a game is not a whole number of pence. This also applies in situations where the maximum stake can be divided into a number of “lines” for a single use of the machine; the stake for each “line” must be a whole number of pence.
5.10 Payment Limits
There are a number of rules about the amounts that can be paid in a single action in relation to the use of a gaming machine. These rules are complex and dictate the payment limits, depending on the type of payment, the category of the gaming machine and its date of manufacture.
There are three payment concepts, namely:
a) The Deposited Amount, which is the maximum amount that can be inserted into the gaming machine in a single action.
b) The Committed Amount, which is the maximum amount that can be committed at any one time to play the gaming machine; once committed, the amount cannot be recovered by the player and must be used to play the machine; if the machine already holds a Deposited Amount to the credit of the player, the Committed Amount is taken from that credit; and
c) The Stake, which is the amount required to play the gaming machine once.
Details relating to these will be provided by your licensed machine supplier.
The autoplay function enables players who have a pot of money deposited on the machine to play a series of games automatically without having to press the “Play” button to begin each individual game.
Autoplay functions are not permitted on gaming machines that have a single deposit meter (i.e. there is no facility for creating or recording committed funds).
5.12 Nature of Prizes
Only Category D machines are allowed to offer non-money prizes. All other gaming machine categories must offer money prizes only.
Note that tokens, Smartcards, TITO tickets and similar objects, which have no other purpose than acting as a cash substitute, are treated as money prizes for these purposes.
For Category D gaming machines, the non-money prizes in the form of goods or services must not be of a kind which it is illegal to sell or supply to a person under 18 years of age.
In certain situations it is conceivable that a small residue of the Deposited money is left on the gaming machine and cannot be recovered by the player because the machine is physically unable to deliver the correct denomination of coin.
In such situations, the residue may be left on the machine for use by the next player, provided that:
a) the amount involved is less than £1; and
b) it cannot be recovered because the machine cannot deliver the correct denomination of coin to the exact amount of the residue, nor can it pay the amount by any other means.
5.14 Delivery of Prizes
The general rules for the delivery of prizes are that:
a) The gaming machine must provide the winner with information about the prize that has been won (if a money prize) or must provide the winner with the means for collecting that prize (if a non-money prize).
b) Information about the type of non-money prize won must be displayed on the machine or in the premises.
c) The winner must have the opportunity to collect the whole amount of the prize (if a money prize).
d) Where the prize is not held by the machine, it must be available for collection by the winner at the premises where the machine is situated and at a time when gaming machines are available for play.
e) In the case of a money prize not collected by the winner, the machine must not automatically make it available for use as a stake.
5.15 Delivery of Money Prizes
In the case of single meter machines, where the stake is taken from the Deposited Amount, a winning money prize may not be added to the Deposited Amount until the winner has been given the opportunity to collect the full amount of that prize if:
a) in respect of a Category B3 machine, it exceeds £50;
b) in respect of a Category B4 or C machine, it exceeds £10; or
c) in respect of a Category D machine, it is of any amount.
In the case of a gaming machine operating the Autoplay facility, a money prize must not be available to pay a further stake unless the winner takes action to allow that to happen.
5.16 Manufacture, Supply and Maintenance of Gaming Machines
Section 243 of the Act makes it an offence to manufacture, supply, install, adapt, maintain or repair a gaming machine without the appropriate Operating Licence.
But, the supply of a gaming machine as scrap (without any element of salvage) or as part of a sale of property in which the machine has been used does not constitute an offence.
5.17 Gaming Machine Testing Strategy
The Gambling Commission has published guidelines setting out the strategy for testing game titles manufactured after 1st September 2007. These games must be tested against all sections of the applicable standard and relevant regulatory requirements in force at the time of testing, by a Commission approved third party test house.
5.18 Legacy Machines
The Gambling Commission has produced a document entitled ‘Machine Standards Category B3, B4, C and D (Legacy Machines) June 2007’ which sets out the circumstances in which these machines may continue to be used. A link is available at the Resource Centre.