Transfer of gaming machine entitlements between clubs

Electronic gaming machine entitlements can be transferred between clubs temporarily or permanently, up to the maximum approved number of entitlements for the recipient club. Clubs must seek the Commissioner of Liquor and Gaming's approval of a gaming machine licence or an increase in the approved number of gaming machines before entitlements can be obtained.

Temporary transfer of gaming machine entitlements

In a temporary transfer, 1 club (the transferor) provides some or all of its entitlements to another club (the transferee) on a temporary basis.

During a temporary transfer, the:

  • entitlements remain the property of the transferor, but are used by the transferee at their premises
  • transferee pays the transferor a periodic fee for the use of the entitlements
  • transferee receives all gaming revenue generated by the machines and must pay all taxes associated with the revenue.

Clubs are advised to seek legal and financial advice when negotiating a transfer of entitlements.

Clubs are free to approach other clubs to negotiate transfers. Once the clubs agree on the term of the transfer and the fee to be paid for each entitlement, the transferor club must apply for approval of the transfer of entitlements on a temporary basis. If the application is approved, the transfer takes effect at a date nominated in the application form.

Once the transfer is approved, the transferee club may install the gaming machines. However, these machines cannot be operated until the transfer takes effect on the date nominated in the approved transfer application.

The Gaming Machine Act 1991 requires parties to a temporary transfer to retain a register of entitlements—contact us for more information.

Temporary transferee (the club receiving entitlements)

To be a temporary transferee (recipient) of gaming machine entitlements from eligible temporary transferors your club must:

  • hold a gaming machine licence
  • and
  • not be a temporary transferor.

A transferee may accept temporary transfers from any number of transferors, provided that the total number of entitlements for the transferee does not exceed its approved number of gaming machines.

Temporary transferor (the club transferring entitlements)

A club can be a temporary transferor if all of the following apply:

  • the club is a gaming machine licensee
  • the approved number of gaming machines fixed on the club's licence is less than 30
  • the club has no surplus entitlements that must be permanently transferred as the result of a decrease, surrender or cessation of gaming at an additional premises
  • the club doesn't already have a temporary transfer in place in which the club is either a temporary transferee or temporary transferor.

Clubs that have been granted a gaming machine licence, or received approval of an additional premises or an increase in the approved number of gaming machines, cannot be temporary transferors until 3 years from the date of the approval.

Transferor's gaming machine licence

Unlike a permanent transfer, in a temporary transfer term the transferor must not permanently decrease the number of gaming machine or surrender their licence. If the transferor loses its gaming or liquor licence, the transfer of entitlements becomes invalid.

A transferor may temporarily transfer all of its entitlements (but only to 1 transferee), to the effect that the transferor premises operates zero gaming machines. However, the transferor must retain a current gaming machine licence, with sufficient approved gaming machines to account for the return of the entitlements at the end of the term.

Term and payment for temporary transfer of entitlements

Consideration (payment to the transferor) for the transfer must be a flat fee (monetary) payable at a frequency determined by both parties.

The minimum term for temporary transfer of gaming machine entitlements is 1 year. The maximum term is 8 years.

The Office of Liquor and Gaming Regulation (OLGR) will ensure, via the monitoring system, that the transferor club disables an appropriate number of gaming machines at close of business on the day before the transfer is to take effect. At the expiration of the temporary transfer, the entitlements return to the transferor club, who may use them to operate gaming machines or may negotiate a new transfer.

If during the term of the transfer the parties wish to amend the consideration and/or term of the transfer, the transferor must apply to the Commissioner for a variation of the temporary transfer.

Permanent transfer of gaming machine entitlements

In a permanent transfer of entitlements, one club (the transferor) sells some or all of its entitlements to another club (the transferee). As an encumbrance over an entitlement is of no effect, these entitlements become the property of the transferee.

Clubs are free to approach other clubs to negotiate transfers. Once the clubs agree on the term of the transfer and the fee to be paid for each entitlement, the transferor club must apply to the Commissioner for Liquor and Gaming for approval of the transfer of entitlements on a permanent basis. If the application is approved, the transfer takes effect at a date nominated in the application form.

Clubs are advised to seek legal and financial advice when negotiating a transfer of entitlements.

How to make entitlements available for permanent transfer

Before a transferor club can sell their entitlements to another club, it must permanently reduce the approved number of gaming machines for the premises. It can do this by:

Once the reduction is approved, the club must permanently transfer its surplus entitlements above its new approved number of gaming machines within 2 years, or the entitlements will become the property of the State of Queensland, with no compensation payable.

Obtaining entitlements for permanent transfer

Any club can obtain entitlements under a permanent transfer, provided that:

  • the club holds a gaming machine licence
  • and
  • the approved number of gaming machines for the club exceeds the number of entitlements currently held (this may require the club to obtain approval for a licence, or an increase in the approved number of gaming machines, from the Commissioner. Note: The Commissioner is unable to approve an increase application by a club that is currently a temporary transferor.)

Payment for permanent transfer of entitlement

Payment to the transferor for the transfer of entitlements must be monetary. It is illegal for payment to represent a direct or indirect interest in, or a share or percentage of:

  • the amount bet for the purpose of gaming
  • or
  • any moneys, revenue, profits or earnings from the conduct of gaming.

Completing the permanent transfer of entitlement

Once the transfer is approved, the parties must advise OLGR that settlement of the transfer has occurred. OLGR will then make the necessary arrangements with each club's licensed monitoring operator to action the transfer.

Also consider...

  • Last reviewed: 24 Oct 2019
  • Last updated: 25 Oct 2019