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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Burt & Adams Ltd, R v. [1998] UKHL 14; [1999] AC 247; [1998] 2 All ER 417; [1998] 2 WLR 725 (2nd April, 1998)
URL: http://www.bailii.org/uk/cases/UKHL/1998/14.html
Cite as: [1999] AC 247, [1998] 2 WLR 725, [1998] 2 All ER 417, [1998] UKHL 14

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Burt & Adams Ltd, R v. [1998] UKHL 14; [1999] AC 247; [1998] 2 All ER 417; [1998] 2 WLR 725 (2nd April, 1998)

HOUSE OF LORDS

Lord Goff of Chieveley Lord Lloyd of Berwick Lord Nolan Lord Hoffmann Lord Hope of Craighead

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE

REGINA

v.

BURT & ADAMS LTD
(RESPONDENTS)

(ON APPEAL FROM THE COURT OF APPEAL (CRIMINAL DIVISION)

ON 2 APRIL 1998

LORD GOFF OF CHIEVELEY

My Lords,

I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Hope of Craighead. For the reasons he gives I would dismiss the appeal and answer the question in the negative.

LORD LLOYD OF BERWICK

My Lords,

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hope of Craighead. I agree with his reasons, and conclusion, and gratefully adopt his description of the two types of amusement machine with which this case is concerned. For convenience I set out here section 34(3) of the Gaming Act 1968, so far as relevant:

In count 2 of the indictment the defendants were charged with contravening section 34(3)(b) on the ground that a successful player on the Crane and Grab machine was entitled to receive "an article benefit or advantage" in excess of what is permitted under the subsection, namely, "an article to be used as a token which could be exchanged with other such tokens for a non-monetary prize to a value in excess of £6." The article in question was a teddy bear worth £6 or less. At an early stage of the appeal Mr. Goldring Q.C., for the Crown, was asked what would be the position if the successful player, having won a brown teddy bear, was allowed to exchange it for another teddy bear of different colour but the same value. Mr. Goldring replied that in such a case the police would be unlikely to prosecute. One was glad to hear it.

By the end of the argument he had conceded, correctly in my view, that the right to exchange one teddy bear for another of the same value is not caught by the subsection at all. For the right to exchange one non-monetary prize for another non-monetary prize of the same value does not confer a "benefit or advantage" in excess of what is permitted under the subsection.

The sole question therefore is whether the right to exchange two small teddy bears worth £6 each for one large teddy bear worth £12 or (if the player was sufficiently persistent) 400 teddy bears for a battery operated car of equivalent value, contravenes the section.

In the judgment delivered by Kennedy L.J. which I for my part find entirely convincing, the Court of Appeal has held that this form of "trading up" (as it is called) is not unlawful. It is a practice which has prevailed for many years, apparently without objection. Parliament has had more than one opportunity to say in plain terms, if it had so wished, that the practice of trading up is unlawful. It is difficult to see why the practice should be regarded as contrary to the legislative policy underlying Part III of the Gaming Act 1968, since there is nothing to stop young people spending all day in the amusement arcade winning prizes of £3 on the Pusher machine and then spending the accumulated proceeds as they wish. For all these reasons it may be wondered why the Gaming Board should have seen fit to challenge the decision of the Court of Appeal before your Lordships. But since your Lordships are not of one mind, I add a short judgment of my own in support of the judgment below.

The prosecution case on count 2 depended on showing, as a first step, that the small teddy bear was either "a token" when it emerged from the Crane and Grab machine, or at least became a token or was used as a token when it was exchanged with other "tokens" for a larger teddy bear. If so, it was not exchangeable only for another small teddy bear, and the defendants would be in breach of section 34(3)(b).

It is important to notice that "token" is not defined in the Act. There is no deeming provision by virtue of which the word "token" is deemed to mean or include anything other than its ordinary meaning. Section 34(3)(b) itself distinguishes between non-monetary prizes, such as teddy bears, and tokens exchanged for non-monetary prizes. In other provisions of the Act it is clear that "token" is used in its ordinary sense. Thus section 26(1)(b) refers to "a slot or other aperture for the insertion of money or money's worth in the form of cash or tokens."

But it was argued that since teddy bears have a points value, and are exchangeable according to a fixed scale, they are tokens for the purposes of section 34(3)(b). I do not agree. Tokens are frequently exchangeable for goods. But it does not follow that all exchangeable goods are tokens. The man who is given a tie for Christmas, and is told that it can be exchanged at Harrods within 30 days, receives a tie and not a token.

Parliament could have provided that exchangeable articles, such as teddy bears, are to be deemed to be tokens for the purposes of the Act. But it has not done so. In my judgment "token" in section 34(3)(b) is used in its ordinary sense, and does not include an exchangeable teddy bear.

The only other provision relied on by Mr. Goldring was section 34(8) which defines a non-monetary prize as follows:

"In this section 'non-monetary prize' means a prize which does not consist of or include any money and does not consist of or include any token which can be exchanged for money or money's worth or used for playing a game by means of the machine . . ."

The argument, as I understood it, was that since the teddy bear could be exchanged for another teddy bear and since the second teddy bear would be worth something (with which I would agree) it must follow that the second teddy bear would be money's worth within the meaning of section 34(8) and therefore that the first teddy bear would be excluded from the definition of non-monetary prize. It must therefore be a token.

I would hesitate long before attaching criminal liability to such a convoluted argument. If Parliament had intended to prohibit the exchange of non-monetary prizes for other non-monetary prizes of the same value, by deeming such prizes to be "tokens," it would surely have said so in plain words. But in any event the argument leads nowhere. Section 34(8) is, as Mr. Beloff pointed out, an anti-avoidance provision. Its purpose is to inhibit circumvention of the £3 limit on cash prizes, by preventing non-monetary prizes being turned into cash or the equivalent of cash. There is nothing in the subsection which prohibits the exchange of one non-monetary prize for another non-monetary prize. Nor is there any reason why there should be. Indeed it would make nonsense of the definition if all non-monetary prizes were included in the meaning of money's worth; for the whole purpose of the definition is to distinguish between non-monetary prizes on the one hand and money and money's worth on the other. Money's worth in section 34(8) must therefore be given a narrow construction. It means the equivalent of money, as it does in section 26(1)(b). So far from lending support to the argument that exchangeable teddy bears are tokens for the purpose of section 34(3)(b) the definition in section 34(8) points in the other direction.

Since in my view exchangeable teddy bears are not tokens in themselves, nor used as tokens when exchanged for other teddy bears of the same value, the prosecution's argument on Count 2 never gets off the ground.

I turn to Count 3. It relates to the Pusher machine, and is said to be covered by section 34(3)(c).

The first question is whether the red and black plaques worth 20 and 100 points respectively are "tokens". Contrary to Mr. Beloff's submission, but in agreement with all your Lordships, it seems obvious that they are. The plaques have no intrinsic value. Mr. Beloff's submitted that they are non-monetary prizes. This is, with respect, almost as far-fetched as Mr. Goldring's submission that teddy bears are tokens.

Granted that plaques are tokens, the next step was for the prosecution to show that the right to accumulate plaques as tokens meant that the individual token was not exchangeable only for a prize or prizes worth £6 or less. In conjunction with other plaques it could be exchanged for a prize worth more than £6 depending on how many plaques the player had won.

The fallacy in this argument is that it ignores the language of section 34(3). The limit of £6 (or £3 cash) applies only "in respect of any one game." The right to obtain a bear worth £12 is not "a benefit or advantage" in respect of any one game, but a benefit or advantage in respect of not less than two games. There is nothing in section 34(3)(b) or elsewhere to prevent the accumulation of cash. Nor is there anything to prevent the accumulation of tokens. "Trading up" in tokens, whereby the player receives one larger prize instead of several smaller prizes of the same value is not unlawful. Nor is "trading up" in teddy bears.

It is said that this construction would allow wholesale evasion of the Act. While a single plaque might be advertised as being worth only £6, the rules might provide for two or more plaques together to be worth not £12 but £100 or £1,000. The subsection would not be infringed because in respect of any one game considered on its own the limit would not have been exceeded.

Putting aside the commercial implausibility of this example, it seems clear enough that the scheme would not work. It would meet with the same answer as that given by the House in Cronin v. Grierson [1968] A.C. 895. It was held in that case that the more favourable odds enjoyed by the player after winning the jackpot was a benefit or advantage in excess of that permitted by section 2(2) of the Betting Gaming and Lotteries Act 1964 "in respect of any playing of the game", namely, the game in which he won the jackpot. By the same reasoning the increased value of the second plaque in combination with the first plaque would be held to be a benefit received by the player in respect of the game in which he won the first plaque. So I see no scope for evasion.

Finally it was said that the right to exchange a single plaque for a single teddy bear is itself a benefit. But if I am right that a plaque is a token, this is the very benefit which is permitted by the section. For the same reason the right to exchange a single teddy bear for another teddy bear of equal value does not infringe the Act, as indeed Mr. Goldring conceded.

I would dismiss the appeal.

LORD NOLAN

My Lords,

I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Hope of Craighead and Lord Hoffmann. I agree with Lord Hope in concluding that the appeal should be dismissed and save in one respect I agree with the reasons by which he arrives at that conclusion.

The respect in which I differ relates to the statutory role of the teddy bears or other soft toys and of the plaques which are the subject of counts 2 and 3 of the Indictment. Like Lord Hoffmann, I consider them to be tokens within the meaning of section 34(8). Let me repeat the words of the subsection, so far as material:

a

The teddy bear or other soft toy brings to the player who wins it the right of exchange (to the value of 100 points) for another prize. It shares this characteristic with the red plaques (20 points) and the black plaques (100 points) which are the subject of count 3 and which, to my mind, are clearly tokens. It is said, however, that the teddy bear is distinguishable from the plaque because it has an intrinsic value and is designed to give pleasure to its owner. But a book token has an intrinsic value in the book market which is equal to its face value, and is designed to give its owner the pleasure of freedom of choice. In determining whether or not an article is a token I do not think that its appearance, or intrinsic value, or suitability for different kinds of use can be decisive. For the cold-blooded and unsentimental purposes of the subsection, as it seems to me, a token is simply an article which can be used as a means of exchange for money or moneys worth.

Another argument put forward on behalf of the respondent is that neither the soft toys nor the plaques are tokens within the meaning of the subsection because the non-monetary prizes for which they may be exchanged are not money's worth within the meaning of Part III of the Act. I cannot accept this argument. The prizes are indisputably to my mind, money's worth within the ordinary meaning of those words. They are worth money. Section 34(3) recognises their character as such by placing a limit upon their permissible monetary value. To read section 34(8) in such a way as to prevent articles with an intrinsic value from qualifying as tokens, and as excluding non-monetary prizes from the concept of money's worth would seem to me to place an unduly restrictive meaning upon the words used.

But whether the soft toys and the plaques are properly regarded as non-monetary prizes or as tokens, the "trading up" question still has to be answered. As I have indicated, in company with the majority of your Lordships I would answer it in favour of the respondent. For it is common ground that the soft toys or plaques, including the rights of exchange which they give, are worth no more than £6. Therefore, if properly regarded as non-monetary prizes, they are within the limit.

What if they are properly regarded as tokens? Here again the appellant fails in my judgment because no single token carries the right of exchange for non-monetary prizes worth more than £6. The fact that two tokens can together be exchanged for a non-monetary prize or prizes worth £12 is neither here or there. The exchange value of each token is still no more than £6. Strictly I suppose it might be argued that in this instance the token is not so much exchangeable for a non-monetary prize worth £6 as for an undivided share in half of a non-monetary prize worth £12: but I would see no harm and no great difficulty in reading "non-monetary prize" to include an undivided share in a non-monetary prize provided that the £6 limit of value per token is not exceeded.

Suppose, however, two tokens together could be exchanged for a non-monetary prize worth £20, £200, or £2,000. In my judgment, the section would then be infringed. That is because the token could not be described as "exchangeable only" for £6 in money's worth of non-monetary prize. So to describe it would ignore the possibility of its being exchanged, in combination with another token, for more than £6 worth of non-monetary prize. This possibility is a benefit which contravenes both the letter and spirit of the sub-section, since it improves the odds in favour of the persistent gambler. But there is no such additional possibility or benefit in the present case.

For these reasons I concur with the answer proposed by Lord Hope of Craighead to the question before your Lordships on the assumption which his Lordship makes.

LORD HOFFMANN

My Lords,

Gaming machines are regulated by Part III of the Gaming Act 1968. Machines which offer large money prizes can be used only in premises such as licensed gaming clubs to which the public do not have access. But machines which are used, as the Act says "for gaming by way of amusement with prizes," may be used at fairgrounds and amusement arcades to which entry is unrestricted. The term "amusement with prizes" accurately conveys the legislative policy. The machines are primarily for amusement and the prizes are intended only to add some excitement to playing the game.

To give effect to this policy, the Act severely restricts both the charges which can be made for playing the game and the value of the prizes which can be won. In the original Act, the maximum charge allowed was a shilling and the maximum prizes which could be won in any game were two shillings in money or something worth less than five shillings. Since then, the values have from time to time been increased by statutory instrument. When the events giving rise to this appeal took place in 1993, the maximum charge was 20p and the maximum prizes were £3 in money and £6 in kind. The limits as to prizes are imposed by section 34(3) of the Act, which reads as follows:

Contravention of any provision of section 34 is an offence: see section 38(6).

The respondents, whom I shall call "the company", operate an amusement arcade at Rhyl. It includes two types of machine which have been respectively called the "pusher" and the "crane." The pusher has a moving tray carrying various items which can be dislodged into a chute by coins pushed in by the player. The dislodged items can then be extracted by the player. They include red and black plaques which can be exchanged for items in the company's prize redemption desk. The company allocates a value in points to the items of merchandise available as prizes. For the purposes of exchange, red plaques are worth 20 points and black ones 100 points.

Playing the crane involves using a grab to try to pick up a soft toy and drop it into the chute. The soft toys are prizes in their own right which players may keep if they so wish and it is agreed that they are worth less than £6. But prominent notices tell players that they may also be exchanged for merchandise at the prize redemption desk and for this purpose they have the same 100 point value as a black plaque.

The novel feature of the company's operations which attracted the attention of the Gaming Board was that they did not require the player to exchange his plaque or soft toy after each game. He could accumulate plaques or toys or both and eventually exchange them for items of merchandise worth considerably more than £6. So, for example, the redemption desk offered items such as television sets and radios which could be exchanged in return for a stipulated number of plaques or soft toys. The Gaming Board took the view that the right to exchange the plaque or toy (together with other such plaques or toys) for an item worth more than £6 gave the player a "benefit or advantage" additional to one of those permitted under the four paragraphs of section 34(3). It instituted a prosecution for infringement of section 34(3). There were three counts, but I need refer only to counts 2 and 3. Count 2 alleged that a player of the crane machine could receive a benefit or advantage other than one permitted under section 34(3), namely "an article to be used as a token which could be exchanged with other such tokens for a non-monetary prize to a value in excess of £6." Count 3 alleged that a player of the pusher machine could receive a similar benefit or advantage.

There was no dispute of fact at the trial before His Honour Judge Evans Q.C. An agreed statement was put before him. On those facts he ruled that an offence had been committed and the company thereupon pleaded guilty. The Court of Appeal (Criminal Division) allowed an appeal and quashed the convictions. Against that decision the prosecution appeals.

It will be convenient to begin with count 3, because count 2 has an additional complicating feature (namely, the use of a soft toy as a means of exchange) which count 3 lacks. In all other respects, the two counts raise the same issues. I shall therefore defer considering the effect of the additional feature of count 2 until I have dealt with the matters which both counts have in common.

The first question is whether the plaques are tokens within the meaning of the Act. Mr. Beloff Q.C., who appeared for the company, said that although the plaque might ordinarily be regarded as a quintessential token, it was deemed not to be by virtue of the definition of a "non-monetary prize" in section 34(8):

"In this section, 'non-monetary prize' means a prize which does not consist of or include any money and does not consist of or include any token which can be exchanged for money or money's worth or used for playing a game by means of the machine. . . "

Mr Beloff submitted that the plaque could not be exchanged for money or money's worth or used for playing another game. "Money's worth," he said, meant something rather like money and did not include the various items of merchandise at the prize redemption desk for which the plaque could be exchanged.

In my view this construction is quite untenable. "Money's worth" is a legal term of art. As Buckley J. said in Secretan v. Hart [1969] 1 W.L.R. 1599, 1603 it is an expression:-

"very familiar to lawyers as being a way of expressing the price or consideration given for property where property is acquired in return for something other than money, such as services or other property, where the price or consideration which the acquirer gives for the property has got to be turned into money before it can be expressed in terms of money."

In my opinion, "money's worth" means anything which is capable of being turned into money, such as the items of merchandise for which the plaques could be exchanged. There is nothing in the context of the Act which suggests that it was intended to have any other meaning.

The question is, therefore, whether it can be said of such a token that it is "exchangeable only" for a money prize not exceeding £3 (paragraph (a)), a non-monetary prize of a value not exceeding £6 (paragraph (b)) or a money prize not exceeding £3 and a non-monetary prize not exceeding £6 less the amount of the money prize (paragraph (c)). If, besides being exchangeable for one or other of these prizes, the plaque confers some additional "benefit or advantage," section 34 is infringed.

It seems to me plain that a plaque won in a single game does confer an additional benefit or advantage, namely, that of being exchangeable, together with other plaques or articles having a value in points, for merchandise of a value exceeding £6. Each plaque carries the advantage of being able to be exchanged together with other plaques for a television, radio, etc. Against this simple conclusion, Mr. Beloff Q.C. offered two arguments.

First, he said that the additional benefit or advantage depended upon obtaining further plaques by playing additional games. Therefore the right to exchange plaques for more valuable items could not be said to have been obtained "in respect of any one game".

This, in my view, is merely a piece of verbal sleight of hand. If the argument were correct, it would follow that the provisions of the Act could easily be evaded by providing that a single plaque could be exchanged only for, say, £3, but that anyone who obtained two plaques could exchange them for £200 or a television set worth £200. In such a case it could equally be said that £3 was all that could be obtained in respect of any one game.

To meet this difficulty, Mr. Beloff deployed his second argument, which was to point out that there was no evidence that the value of any prize divided by the minimum number of plaques needed to secure it was more than £6. Therefore, whatever benefit or advantage might be obtained, it did not exceed the permitted limit.

But this argument in my view ignores the language of the Act. It does not say that the value of any benefits or advantages obtained by playing a game should not exceed £6. It says that the only benefit or advantage which a plaque may confer is the right to exchange it for a money prize of £3 or a non-monetary prize worth less than £6 or a combination of both. So far as the plaque confers any additional benefit or advantage at all, it infringes the section. Therefore, unless the right to make an exchange in combination with other plaques is ignored altogether (which leads to the absurd consequences I have just mentioned) it must be unlawful.

I turn then to count 2, which is the same as count 3 except that the item which may be exchanged is not a plaque but a soft toy. The only additional question raised by this count is whether the toy is a "token" or a "non-monetary prize". In the case of tokens, the Act is concerned with their exchange value. In the case of non-monetary prizes, the Act is concerned only with their value and not with what can be done with them.

The Act contains no definition of a "token", but the scheme of the Act shows that the feature of a token with which Parliament was concerned was its exchangeability as of right for something else. In ordinary life, a typical token is a coin, which by virtue of the rules as to legal tender is exchangeable as payment for goods or services. A token may have little or no intrinsic value (as is nowadays the case with coins) but this is not necessarily the case, although obviously a token which had greater intrinsic value than exchange value would cease to be used as a means of exchange: something which has from time to time happened with coinage.

In the context of this Act, therefore, it seems to me that the identifying characteristic of a token must be the right to exchange it for something else. Anything which can be obtained from the machine and exchanged for something else is, for the purposes of the Act, a "token". I do not think it is relevant to consider, as the Court of Appeal did, the analogy of the buyer of a book exchanging it for another, which is not as of right and in any case an altogether different commercial context. Nor am I concerned to decide whether the right to exchange a soft toy for another of the same value (say of a different colour) would make it a "token." Since ex hypothesi both are worth less than £6, the point is academic. In this case, however, the company advertised the exchangeability of a soft toy as a desirable right attached to them and in my opinion they were just as much tokens as the plaques. The fact that someone might choose to keep one rather than exchange it is not sufficient to deprive it of the character of a token. In construing the Act in this way, I am again concerned by the opportunity for wholesale evasion which any other construction would provide. If the soft toy can only be a "non-monetary prize", there would be nothing to stop the operator from advertising that a single soft toy could be exchanged for a television set or a large sum of money. As long as the intrinsic value of the soft toy was less than £6, the Act would be satisfied. I decline to give the Act a construction which leads to such an absurdity. Nor do I think that the difficulty could be met by asking, as a question of fact, whether the value of the prize offered at the redemption desk was so disproportionate in value to the item recovered from the machine as to make the latter a token. This is a criminal statute which ought to be certain in its effect. The only way to prevent the consequences which I have described is to treat any exchangeable item as a token.

Your Lordships have been shown photographs of the shelves of the company's prize redemption desk, stocked with desirable consumer durables. In my view, it was the policy of section 34 to ensure that children and others were not attracted to amusement arcades by the prospect of winning such prizes. The decision of the Court of Appeal entirely defeats this policy and I would therefore allow the appeal and restore the convictions.

LORD HOPE OF CRAIGHEAD

My Lords,

The issue in this appeal relates to the conditions which must be observed where machines are used for gaming by way of amusement with prizes. This activity is regulated by Part III of the Gaming Act 1968. That Part of the Act applies to any machine which is constructed or adapted for playing a game of chance by means of the machine and has a slot or other aperture for the insertion of money or money's worth in the form of cash or tokens: see section 26. These machines may be used in a variety of premises for which an appropriate licence or permit is for the time being in force. The premises with which we are concerned in this case are the Palace Amusement Arcade, 38-41 West Parade, Rhyl, Clwyd. They are owned and operated by the respondent, to whom a permit has been granted under section 34 of the Act.

There were at the material time various types of amusement machine within the premises. Some of these machines gave prizes in respect of the games played on them. Two types of machine came to the attention of the police when they visited the Arcade together with members of the Gaming Board on 9 March 1993. One was a Crane and Grab machine, of which there were 25 in the premises on that date. These machines contained soft toys such as teddy bears. They could be won by operating a small crane to pick up the prize and drop it into a chute for collection. Only one such toy could be won in any one game. The other type, of which there were five in the premises, was a Pusher machine. The prizes within this machine were held on moving trays. They comprised 10 pence coins, £1 notes issued by the Royal Bank of Scotland, wrist watches and red and black plaques. These prizes could be obtained in any combination by dislodging them from the moving tray on to a chute from which the player could collect them.

Section 34(1)(a) of the Act provides that the conditions specified in the following provisions of that section shall be observed where a machine to which Part III of the Act applies is used for gaming on any premises in respect of which a permit granted for the purposes of that section is for the time being in force. The condition specified in subsection (2) lays down the maximum amount which may be charged for play for playing a game once by means of the machine. On 9 March 1993 this amount, as substituted by the Gaming Act (Variation of Monetary Limits) (No.2) Order 1989, S.I. 1989 No. 2190, was one or more coins or tokens of an amount or value not exceeding 20 pence. The condition specified in subsection (3) lays down the maximum amount which may be received by a player in respect of any one game played by means of the machine. Substituting for the figures in this subsection as originally enacted the figures in force on 9 March 1993 as set out in the Gaming Act (Variation of Monetary Limits) (No.4) Order 1992, S.I. 1992 No. 2647, this subsection provides as follows:

a

b

c

d

No question arises in this case about the maximum amount which may be charged for playing a game once by means of these two types of machine. The Crane and Grab machines were operated for any one game by inserting a 20 pence coin into a coin slot attached to the machine. The Pusher machines were also coin operated in the same way. The amounts were within the permitted maximum. Moreover no prize or prizes won by a successful player in respect of any one game played by means of either machine was worth more than £6. The prize or prizes which could be obtained in respect of any one game were thus within the limits laid down by subsection (3) which applied on the relevant date.

Notices were displayed at various places within the arcade which stated that prizes for the Crane and Grab machines and tickets and tokens from the other machines, including the plaques from the Pusher machines, had a points value. They also stated that these articles could be combined to redeem larger prizes according to the points value of these prizes. Inside each Crane and Grab machine there was a notice stating that each win was worth a 100 points. It invited the player to collect wins and to trade for larger prizes at the redemption desk. The red plaques in the Pusher machines had a value of 20 points, and the black plaques had a value of 100 points. There were a number of display cabinets within the arcade in which there were displayed the various prizes which could be obtained in this way. These included many prizes which had a value of less than £6 per item. But they also included prizes which were worth much more than £6. These included television sets, radio cassettes, electric irons, a food processor and other electrical goods of high value. For example, there was a battery operated car with a points value of 40,000 points and a television set with a points value of 15,000 points. There were also various soft toys, amongst which was a teddy bear with a points value of 2,500 points.

The question which lies at the heart of this case relates to the right which was given to the players in the arcade to aggregate and exchange their prizes for a larger prize--a practice which is known as "trading up." The parties to this appeal have agreed in the Statement of Facts that, if the prizes won by a successful player in respect of any one game were accumulated and exchanged for a larger prize, the larger prize would not be worth more than the sum of all the prizes which were given up in exchange for it. For example, prizes won in respect of two games which would be worth no more than £6 each could not be exchanged for a larger prize which was worth more than £12. But the Crown maintains that the right to aggregate and exchange the prizes won in respect of any one game for a larger prize is a benefit or advantage which is not permitted by section 34(3) and is unlawful. So on 1 December 1994 the respondent was prosecuted at the Mold Crown Court on three counts of unlawful gaming contrary to section 38(6) of the Gaming Act 1968. After hearing legal argument the judge, His Honour Judge Evans Q.C. held that the activities with which each count was concerned were unlawful. The respondent pleaded guilty on all three counts and was given an absolute discharge. The convictions were then appealed to the Court of Appeal (Criminal Division). At the hearing in the Court of Appeal the respondent did not pursue the appeal in respect of count one. But on 9 November 1995 the Court of Appeal (Kennedy L.J., Wright J. and the Recorder of Liverpool) allowed the appeal on counts two and three. It is against that decision that the Crown has now appealed to this House.

Count two was concerned with the Crane and Grab machine. Count three was concerned with the Pusher machine. The particulars of each offence were the same, except for the reference to the type of machine. So it is necessary only to quote the particulars in regard to the Crane and Grab machine which were set out in count two. They were as follows:

"Burt and Adams Limited, on or about the 9th day of March 1993, was the holder of a permit granted for the purposes of section 34 of the Gaming Act 1968 in respect of premises at the Palace Arcade, West Parade, Rhyl, in the County of Clwyd, in relation to which premises a provision of the said Section was contravened, in that a player was entitled to receive, in respect of any one game played by means of a machine, namely a Crane and Grab machine to which Part III of the Gaming Act 1968 applies, an article, a benefit or an advantage other than one only of those permitted by Section 34(3) of the said Act; namely an article to be used as a token which could be exchanged with other such tokens for a non- monetary prize to a value in excess of £6."

It will be noted that the particulars did not identify the paragraphs in section 34(3) which were applicable to the prizes which could be obtained in respect of any one game played by each of these two machines. But it is agreed that in the case of the Crane and Grab machine the relevant paragraph is paragraph (b), as only one soft toy could be obtained in respect of any one game and it was neither a money prize nor a token which could be used for playing further games by means of the machine. It is also agreed that in the case of the Pusher machine the relevant paragraph is paragraph (c), as the prizes which could be obtained in respect of any one game on this machine consisted of a combination of prizes. Mr. Goldring Q.C. for the Crown said that the prosecution did not wish to take the point that the plaques, if they were tokens within the meaning of that paragraph, were not exchangeable only for a combination of a money prize and a non-monetary prize. In the result the prizes obtainable from both machines raise substantially the same issues.

For the Crown it was submitted by Mr. Goldring that both the soft toys and the plaques were "tokens" within the meaning of section 34(3). This was because the successful player had the right to exchange these articles for something else in money's worth. He said that the entitlement to aggregate the soft toys or plaques for each game and to trade up for a prize worth more than £6 was not permitted by section 34(3). This was because paragraph (b) of that subsection provided that the only article, benefit or advantage which the player was entitled to receive in respect of any one game, if it was a token, was "a token exchangeable only for such a non-monetary prize or such non-monetary prizes," that is to say a non-monetary prize or prizes with a value or aggregate value which did not exceed £6. The entitlement to trade up was therefore a benefit or advantage which was prohibited.

Mr. Beloff Q.C. for the respondent submitted that neither the soft toys nor the plaques were tokens. He said that they were both "non-monetary prizes." The mere fact that they were exchangeable for something else did not mean that they were tokens within the meaning of section 34. The opportunity to exchange them, when aggregated with other prizes, for a more valuable article was not a separate benefit or advantage but was an ordinary and integral part of the original prize. Furthermore, on the agreed facts, it did not increase the value of the original prize or prizes for each game. This was because the larger and more valuable article could not be worth more than the sum of the prizes won in respect of each game which were exchanged for it. For example, two teddy bears worth no more than £6 each could be exchanged only for a teddy bear worth no more than £12. They could not be exchanged for a more valuable teddy bear.

The first point which has to be considered is whether the teddy bear or other soft toy which the player could receive from the Crane and Grab machine was a monetary prize or a token. The word "token" is not defined in the Act. As Kennedy L.J. said in the Court of Appeal, it is a word whose meaning can differ according to the context. In the context of Part III of the Act it is an article which may have one or other or both of two different uses. It may be used for playing a game by means of a machine to which that part of the Act applies, or it may be used for exchanging it for some other article. Section 26(1)(b) refers to "a slot or other aperture for the insertion of money or money's worth in the form of cash or tokens." Section 34(2) refers to "one or more coins or tokens inserted in the machine." The word is used in the same way in section 34(4), section 37(1)(b), section 37(3)(b) and section 52(5). These references all suggest that the word is being used here to describe a disc or other similar article which will perform the same function as a coin when put into the machine. On the other hand paragraphs (a)--(c) of section 34(3) refer to tokens which can be exchanged for a money prize, for a non-monetary prize or non-monetary prizes and for a combination of a money prize and a non-monetary prize respectively. These references concentrate on the token as something which can be exchanged for some other article, according to the terms and conditions under which each game is played. A disc or other similar article, just like a coin, can perform that function also. Section 34(3)(d) refers to both uses when it states:

d

Mr Goldring relied on the definition of the expression "non-monetary prize" in section 34(8), which is in these terms:

"In this section 'non-monetary prize' means a prize which does not consist of or include any money and does not consist of or include any token which can be exchanged for money or money's worth or used for playing a game by means of the machine; . . ."

He said that a soft toy which was used for trading in the premises by exchanging it for another article was a "token" and not a "non-monetary prize," because it was being exchanged for something which fell within the expression "money's worth". I do not accept that argument, for two reasons.

The first reason is that a teddy bear or other soft toy-- assuming always that it is a genuine toy and not sham or a device--is something which has its own intrinsic value as a toy. It is something which can be played with or admired and kept for amusement. No doubt it can, like any other article, be exchanged for something else if another person is willing to enter into such a transaction. In that sense it has a value which can be measured in money. But that does not alter its essential character as a toy. The second reason relates to the function of the definition of "non-monetary prize" in section 34(8). Its function is to distinguish between money and things which it calls tokens, which can be exchanged for money or money's worth or be used like money for playing a game by means of the machine on the one hand, and all other non-monetary articles on the other. This is something which had to be made clear, because different maxima are set in section 34(3) for money prizes on the one hand and for non-monetary prizes on the other. It was submitted that the expression "money's worth" was wide enough according to the ordinary meaning of these words to include anything which could be valued in money, such as any non-monetary prize. But in the context of Part III of the Act I do not think that such a wide meaning can be given to this phrase. The meaning to be given to it in this context is indicated by section 26(3) of the Act which provides:

"(3) In this Part of this Act 'charge for play' means an amount paid in money or money's worth by or on behalf of a player in order to play one or more games by means of a machine to which this Part of this Act applies."

A token, in other words, is something which has no intrinsic value unless it is used or exchanged for something else. What that something else will be must depend on its design and the conditions under which it is issued. As to design, the Act uses the word "token" when it means something which can be used for playing a game by inserting it into the machine. As to conditions, the Act requires the permit holder to specify the article or articles for which it is exchangeable. If that article is a non-monetary prize only, and the token cannot also be used for playing a game by means of a machine, it is treated in the same way as a non-monetary article or articles. If it is money or money's worth, or if it can be used like money for playing a game by means of the machine, it is treated in the same way as if it were money. In my opinion it is quite clear that, as the teddy bears or other soft toys could be exchanged only for another non-monetary article, they fell outside the meaning of the word "token" in section 34(8). And they were not tokens within the ordinary meaning of that word. They were genuine soft toys of the kind which is commonly bought and sold in a toy shop, not things which were got up to look like toys.

The next question to be considered is whether the red and black plaques which could be obtained as prizes from the Pusher machines were tokens within the meaning of section 34(3)(c). Mr. Goldring submitted that they were. Mr. Beloff submitted that they were not, because they were not tokens as described in section 34(8). On this point I prefer Mr. Goldring's argument.

As I have already said, I think that the function of the definition of the expression "non-monetary prize" in section 34(8) is to distinguish between non-monetary prizes on the one hand and money, or other things which can be used in the same way as money, on the other. But this subsection does not purport to offer an exhaustive definition of the word "token." So, while I agree with Mr Beloff that the plaques were not tokens of the kind referred to in section 34(8), because the evidence was that these plaques could not be exchanged for money or for things which could be used like money or used for playing a game by means of the machine, I do not think that this means that they could not be regarded as tokens at all. The plaques had no intrinsic value on their own. Their only value lay in the fact that they had a points value, so that they could be exchanged for other articles with an equivalent points value. It seems to me that they were tokens within the ordinary meaning of that word.

I come now to the question of trading up. On this issue the argument for the Crown was that, as both the soft toys and the plaques were tokens and as they could be exchanged in combination with other plaques or soft toys for non-monetary prizes of a greater value than £6, the player obtained a benefit or advantage which was not permitted by section 34(3). This was because section 34(3) permits the player to receive or to be entitled to receive a token which is exchangeable only for a non-monetary prize or prizes of a value or aggregate value not exceeding £6.

I consider that this argument fails so far as the teddy bears and other soft toys are concerned, on the ground that they were non-monetary prizes and not tokens. Moreover the fact that the player could by aggregating several of these non- monetary prizes obtain a non-monetary prize of a higher value at the redemption centre did not render the prize or prizes which he was entitled to receive in respect of any one game unlawful. This is because, on the agreed facts, the more valuable non-monetary prize which he could obtain by trading up could not exceed the value of all the non-monetary prizes which had to be given up in exchange for it. So the ability to trade up did not increase the value of the prize obtained from any one game above the permitted maximum.

In Cronin v. Grierson [1968] A.C. 895 the player was able to win a jackpot which rendered the machine operable for four further games at greatly increased odds for the same stake. Lord Morris of Borth-y-Gest said, at p. 907 that the advantage which accrued to a person who won the jackpot was something other than or more than and additional to the maximum which was permitted by section 2 of the Betting, Gaming and Lotteries Act 1964. He said that this advantage or benefit was a real one which was designed to be bountiful. Mr. Goldring submitted that the situation in the present case was similar, but in my opinion it is quite different. The trading up in this case involved no element of bounty at all. It did not confer any benefit or advantage. The greater value prizes were not worth more than the aggregate of the value of those prizes which had to be given up in exchange.

The argument in regard to the plaques relates to the value of the articles which, by trading up, could be obtained in exchange for them. The question is whether the ability to trade up was in breach of section 34(3) because the items which could be obtained in exchange for them when aggregated were of greater value than the maximum amount which is permitted by section 34(3) in respect of any one game. The answer to this question is to be found in the provisions of the subsection. Two points emerge clearly from what it provides.

The first is that there is no discernible policy against the accumulation of prizes. As Kennedy L.J. observed in the Court of Appeal, small money prizes are permitted by section 34(3)(a) and money by its nature can be accumulated. Moreover there is no discernible policy against the exchange of any non-monetary prize for another non-monetary prize within the same premises. This is not something which is expressly provided for by section 34(3). But there is nothing in the subsection to prevent this, just as there is nothing to prevent the player who has won a money prize from spending all his money on the premises.

The second point is that the scheme of control which section 34 lays down relates only to the playing of any one game. Section 34(2) limits the amount or value which can be charged "for playing a game once by means of the machine." Section 34(3) limits the value of any article, benefit or advantage which a person may receive "in respect of any one game." So the question whether these limits have been exceeded has to be examined game by game. There is nothing in section 34(3) to indicate that the matter can be held in suspense in order to see what may happen in any future game or games. Thus, so long as the token which is received in respect of any one game is exchangeable only for a non-monetary prize or non-monetary prizes of a value or aggregate value not exceeding £6, the conditions of section 34(3) are satisfied. And so long as the value of what can be obtained by trading up is limited to the aggregate of the value of the tokens which are given up in exchange, there is no additional benefit or advantage to be obtained from this which can be said to be unlawful.

For the reasons which I have given I would dismiss the appeal. The Court of Appeal certified the following question as involving a point of law of general public importance :

"Does section 34 of the Gaming Act 1968 prohibit the holder of a permit to operate a machine to which the section applies from offering to the player of the machine, who wins a non-monetary prize or token in playing any one game, the right to accumulate what he wins with non-monetary prizes and/or tokens won by playing further games, and to exchange the same for a non-monetary prize of an aggregate value exceeding £6?"

On the assumption that the value of the non-monetary prize to be obtained in exchange does not exceed the aggregate value of the non-monetary prizes and/or tokens which are given up in exchange for it, I would answer the question in the negative.