Regina v Burt & Adams Ltd

The House considered the meaning and operation of section 34 of the Gaming Act 1968, in particular section 34(3) (the per-game limits on prizes) and section 34(8) (the definition of "non-monetary prize"), and the distinction between a "token" and a genuine non-monetary prize. The court held that the statutory limits in section 34(3) apply to what a player may receive "in respect of any one game" and do not prohibit the aggregation of prizes won in successive games so long as each game's prize complied with the per-game limits.

On classification, the majority concluded that soft toys which are genuine prizes with intrinsic value are properly treated as non-monetary prizes under section 34(8), whereas objects with no intrinsic value but solely a points or exchange function (the plaques) are tokens in the ordinary meaning. Even if articles are tokens, the right to aggregate tokens from separate games and trade them for a larger prize does not amount to an unauthorised additional "benefit or advantage" in respect of any one game, where the aggregated prize does not exceed the sum value of the items exchanged.

The court gave weight to the ordinary meaning of "token" and "money's worth", read the anti-avoidance provision in section 34(8) narrowly, and rejected constructions that would impose criminal liability for commonplace practices of exchanging or aggregating prizes unless Parliament had plainly so provided.

The respondent operated an amusement arcade with Crane and Grab and Pusher machines. Crane machines dispensed soft toys (teddy bears) worth less than £6; Pusher machines dispensed various items including red (20 points) and black (100 points) plaques. Notices permitted players to accumulate toys and plaques and exchange aggregated points for higher-value merchandise at a prize redemption desk. The Gaming Board prosecuted the operator for offences under section 34(3) of the Gaming Act 1968, alleging that the right to "trade up" (aggregate prizes across games to obtain prizes of greater than £6) conferred a prohibited additional benefit or advantage.

Procedural history: At Mold Crown Court the judge held the practice unlawful; the respondent pleaded guilty and received an absolute discharge. The Court of Appeal (Criminal Division) allowed the respondent's appeal on counts concerning the Crane and Pusher machines and quashed convictions. The Crown appealed to the House of Lords.

Issues framed:

• Whether items dispensed by the machines (soft toys and plaques) are "tokens" or "non-monetary prizes" for the purposes of section 34(3) and section 34(8).
• Whether the right to accumulate prizes or tokens from separate games and exchange them for a prize whose value exceeds the per-game limit constitutes an unlawful "benefit or advantage" in respect of any one game under section 34(3).

Court’s reasoning and resolution: The majority held that the statutory controls in Part III are expressed in per-game terms: the limits in section 34(3) govern what may be received in respect of a single game. Lord Hope (majority opinion) reasoned that genuine soft toys have intrinsic value and therefore fall within "non-monetary prize" rather than being tokens as defined by section 34(8); plaques lacking intrinsic value were tokens. The court interpreted "money's worth" in a legal sense (following Secretan v. Hart) and construed section 34(8) as an anti-avoidance measure narrowly aimed at preventing conversion of non-monetary prizes into cash or cash equivalents. The right to aggregate prizes did not increase the value of the prize received in respect of any one game beyond the permitted maximum, and therefore did not create a prohibited additional benefit or advantage. Lords differed on classification of toys as tokens (Lord Hoffmann would have treated toys as tokens and would have allowed the Crown's appeal), but the majority dismissed the Crown's appeal and upheld the Court of Appeal’s decision.

Relief sought: the Crown sought to restore convictions for contravention of section 34(3) imposed at first instance; the House of Lords was asked to determine the certified question of law on "trading up".

Appeal dismissed. The House of Lords (majority) held that section 34(3) must be read as applying to prizes "in respect of any one game"; accumulation of prizes or tokens won in different games and subsequent exchange for a larger prize does not constitute an unlawful additional benefit in respect of any one game so long as the aggregated prize does not exceed the aggregate value of the items exchanged. The court interpreted "token" and "money's worth" in context, treating genuine soft toys as non-monetary prizes (for the majority) and construing section 34(8) narrowly as an anti-avoidance provision. A minority view (Lord Hoffmann) would have treated exchangeable soft toys as tokens and allowed the appeal, but the majority outcome was to dismiss the Crown's appeal.

Convictions entered at Mold Crown Court after a trial judge held the practices unlawful and the respondent pleaded guilty (absolute discharge) (trial proceedings dated 1 December 1994). The Court of Appeal (Criminal Division) allowed the respondent's appeal on counts two and three and quashed the convictions (decision dated 9 November 1995). The Crown appealed to the House of Lords, which delivered judgment on 2 April 1998 ([1998] UKHL 14).