A new way to trade Gaming Machine Entitlements in South Australia

South Australia has significantly changed the way holders of gaming machine licences trade Gaming Machine Entitlements (GME), with the introduction of the Gaming Machine Entitlement Exchange online portal (GMEX).

GMEX commenced on 17 February 2025, providing a modern and transparent portal for the trading of GMEs. GMEX is an approved online, open market style trading system, that allows gaming machine licence holders to trade GMEs (which are required to operate a gaming machine) efficiently and securely.

The trading of GMEs remains subject to the rules of forfeiture, which allows gaming machines to be removed from circulation to comply with the statutory target for the maximum number of gaming machines to be operated in South Australia.

Continuous Trading: Trading of GMEs can now occur at any time and are no longer restricted to set trading rounds conducted by the Liquor and Gambling Commissioner (Commissioner).

Transparency: Prospective buyers and sellers will no longer be anonymous, allowing participants to accept, reject or negotiate offers independently and directly.

Forfeiture Rates: For every “group” of 4 GMEs (or part thereof) that a seller offers for sale, one GME must be forfeited and cancelled. For example:

• if a seller offers to sell anywhere from one to four GMEs, the seller will need to forfeit one additional GME; and
• if a seller offers to five to eight GMEs, two additional GMEs will need to be forfeited,

and so on.

The same system applies for non-profit associations. However, in that case, forfeited entitlements will no longer be transferred to Club One as they were previously and will now be forfeited and cancelled.

Binding Transfer: When a buyer and seller agree to the terms of a trade, a “standard” trade agreement will be automatically generated through GMEX. A buyer may purchase GMEs from multiple sellers under a single trade agreement if all parties agree. Once the trade agreement is approved and signed by the trading parties, it is submitted to the Commissioner for conditional approval. If the Commissioner provides conditional approval, the parties will have seven days to agree settlement terms and arrange payment of the agreed price. All parties must then confirm that payment has been made, which will then trigger the Commissioner to update the GME details on each of the buyer’s and seller’s gaming machine licences. A fee is required for the approval of a trade agreement (see ‘Administration fees’ below).

To use GMEX, registration and approval by Consumer and Business Services on behalf of a licensee is required. Existing Liquor and Gaming Online credentials will not be sufficient. Once a user is approved (Registered User), they will be able to place offers to sell or express an interest to buy, including a nominated price and number of GME. This will allow other Registered Users to discuss and negotiate prices, and if accepted, implement a trade agreement. Purchasers are permitted to purchase GMEs from sellers without the need for an expression of interest.

If a Registered User has multiple hotels listed on their GMEX account, they can internally transfer GMEs through the platform. In the case of internal transfers, prospective buyers will be informed that they are not able to purchase the GMEs within that group. Commissioner approval is required to complete these transactions, and the tiered forfeiture rate will remain applicable.

Hoteliers are required to hold their gaming machine licence for at least two years, prior to selling the entitlements to a subsequent hotel. This is to ensure fair and transparent trading systems and to prevent hotels from being purchased for the sole purpose of obtaining additional GMEs.

GMEX registration fee: $186.00.

Offers to sell a GME or expressions of interest to purchase a GME:

• Profit organisation: $156.00 per GME; or
• Non-profit association: $84.00 per GME.

Application for approval of a trade agreement: $256.00.

If you are selling within two years of holding a licence, application fee for an exemption from the 2-year rule: $156.00.

The Commissioner has discretion to waive, refund or reduce fees.

The GMEX Public Register is live and can be accessed here. The Register allows the public see Offers to Sell, Expressions of Interest to Buy and Completed Trades, including the following information with respect to trades:

• the number of gaming machine entitlements transferred and forfeited;
• the sale price; and
• local government areas where the GME will be located.

For more information, the GMEX User Guide can be found here and further Industry Information can be found here.

If you require assistance with trading GMEs please do not hesitate to contact our liquor licensing and hospitality team who would be pleased to assist.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

Co-authors

Name: Irini Kourakis

Position: Lawyer

Practice: Disputes

Name: Laura Martin

Position: Law Clerk

Practice: Transactions