R v Burt & Adams Ltd

Section 34(3) of the Gaming Act 1968 regulates amusement-machine prizes by reference to each individual game. A player may accumulate non-monetary prizes or tokens won in separate games and exchange them for a more valuable prize, provided that its value does not exceed the aggregate value of the articles surrendered.

Such value-preserving “trading up” supplies no additional benefit or advantage attributable to any one game. A genuine toy with intrinsic value does not become a token merely because it may be exchanged for another non-monetary article. An article having no intrinsic value and deriving its value solely from an entitlement to exchange is a token.

The respondent operated crane and pusher amusement machines under a permit governed by Part III of the Gaming Act 1968. Players could win soft toys or points-bearing plaques, accumulate them across several games and exchange them for merchandise worth more than £6. It was agreed that the merchandise never exceeded the aggregate value of the articles surrendered.

The Crown Court held that the arrangements contravened section 34(3), whereupon the respondent pleaded guilty and received an absolute discharge. The Court of Appeal (Criminal Division) allowed its appeal on counts two and three and quashed those convictions.

The Crown appealed to the House of Lords. The central question was whether section 34 prohibited the accumulation of prizes or tokens from separate games and their exchange for a non-monetary prize exceeding £6 in total value.

1. Appeal dismissed by a majority of four to one. Lord Hope of Craighead delivered the leading speech. Lord Goff of Chieveley agreed with his reasons; Lord Lloyd of Berwick and Lord Nolan agreed with the result and substantially with the central reasoning. Lord Hoffmann dissented.

2. Per Lord Hope, a genuine soft toy with its own intrinsic value was a non-monetary prize rather than a token. Its exchangeability for another non-monetary article did not alter its essential character. Lord Lloyd reached the same conclusion by giving “token” its ordinary meaning. Lord Nolan disagreed on this classification, but considered that the result remained the same because each toy’s exchange value did not exceed £6.

3. Per Lord Hope, the plaques were tokens in their ordinary meaning. They had no intrinsic value and derived their entire value from their assigned points and consequent exchangeability. Lord Lloyd and Lord Nolan agreed that the plaques were tokens.

4. Per Lord Hope, section 34 controls the charge and permitted return game by game. It discloses no policy against accumulating prizes, accumulating tokens or exchanging several articles for a larger prize. Where each game yields no more than the permitted value, and the larger prize does not exceed the aggregate value surrendered, trading up confers no additional benefit or advantage. Lord Lloyd similarly reasoned that an aggregate prize arises from several games, not from any one game. Lord Nolan held that each token retained an exchange value of no more than £6.

5. Cronin v Grierson [1968] A.C. 895 was distinguishable. The improved odds obtained there were a real additional advantage attributable to the game in which the jackpot was won. Value-preserving trading up involved no corresponding bounty. Lord Lloyd added that an arrangement giving accumulated tokens a disproportionately enhanced value would be caught by the same reasoning.

6. Lord Hoffmann would have allowed the appeal and restored the convictions. He considered every article exchangeable as of right to be a token and regarded the ability to combine it with other articles for merchandise exceeding £6 as an impermissible additional advantage.

The certified question was answered in the negative on the assumption that the prize obtained did not exceed the aggregate value of the prizes or tokens surrendered.

1. House of Lords: By a majority of four to one, dismissed the Crown’s appeal and affirmed the quashing of the convictions on counts two and three: [1998] UKHL 14.

2. Court of Appeal (Criminal Division): Allowed the respondent’s appeal on counts two and three and quashed those convictions. The appeal on count one was not pursued.

3. Mold Crown Court: Evans QC held that the activities were unlawful under section 34 of the Gaming Act 1968. The respondent then pleaded guilty and received an absolute discharge.