Can You Borrow Against Gaming Machine Entitlements in Australia?
Pub and Hotel Finance
Gaming entitlements · Loan security by state · Control, value and default
In Victoria, Queensland and the ACT, gaming entitlements cannot be pledged as standalone PPSA security because the law declares them not to be personal property. A loan can still be supported by the venue, its freehold or business assets, gaming income and lender controls over the licence and any transfer. This guide explains what a lender can actually secure, how entitlements affect borrowing capacity, and what happens on a sale, refinance or default.
Quick Answer
Yes, but not against the entitlements on their own. In Victoria, Queensland and the ACT the law declares gaming entitlements are not personal property, so they cannot be pledged as standalone security. In NSW and South Australia there is no equivalent declaration, but a lender still cannot treat an entitlement like ordinary saleable collateral because any transfer has to satisfy the state's gaming rules. In practice, lenders secure the property or business around the entitlements and control what happens to them through the loan documents.
What the entitlements do change is how much the venue is worth and how much gaming income it earns, and that is where extra borrowing comes from. If you are weighing a loan against a licensed venue, talk to us about pub and hotel finance.
What they are: a gaming machine entitlement is a state-issued right to operate one gaming machine at an approved venue, not the machine itself. Also called: poker machine entitlements, pokie entitlements, GMEs, operating authorities (Queensland hotels), authorisations (ACT).
Start from your situation
- Buying a pub with gamingRead the order lender and regulator approvals happen in, then the full pub and hotel finance guide.
- Refinancing or releasing equitySee how gaming income lifts what a lender will advance.
- Selling or leasing some entitlements for cashCheck whether you need your lender's consent and, in Victoria, the profit tax on a sale.
- Buying more entitlements to expandSee how a purchase of entitlements is funded.
- Running a leasehold hotelStart with who owns the entitlements under your lease.
- Behind on payments, or the bank said noRead what happens to entitlements on default, including Victoria's hardship variation, and when private lending is considered.
General information only. Every lender sets its own policy and rules differ by state.
Can gaming machine entitlements be used as security on their own?
Gaming machine entitlements cannot be used as separate loan security in Victoria, Queensland or the ACT, because each of those laws declares them not to be personal property under the PPSA. NSW and South Australia make no such declaration, but a lender there still cannot sell the entitlements without a regulator-approved transfer to an eligible venue.
What does "not personal property" mean for a lender?
The Personal Property Securities Act 2009 (Cth) covers personal property. Its definition of personal property in section 10 leaves out a right, entitlement or authority granted under a law that the law itself declares is not personal property for the purposes of that Act.
Victoria makes that declaration in the Gambling Regulation Act 2003, s 3.4A.5B "Gaming machine entitlement not personal property". Queensland makes it in the Gaming Machine Act 1991, s 13A "Declaration for Commonwealth Act", which covers both entitlements and operating authorities. The ACT makes it in the Gaming Machine Act 2004, s 174A "Licences and authorisations etc are not personal property", for licences, authorisation certificates and authorisations.
So in those three places a lender cannot register a security interest over the entitlement itself on the Personal Property Securities Register.
Does a general security agreement over the business catch them?
A general security agreement covers the operating company's other assets, but where a declaration applies it does not reach the entitlement as personal property. In NSW and South Australia the Act contains no equivalent declaration, and whether a security interest attaches there is a legal question for your solicitor.
Clubs and the casino run under separate rules and are not covered here.
Scroll the table sideways to see every column.
| State | Declared not personal property for the PPSA? | Who holds them | How they transfer | Who can buy |
|---|---|---|---|---|
| NSW | No equivalent declaration in the Act | Held in respect of the hotel licence | To another hotel licence, with Authority approval | Another hotel |
| Victoria | Yes, s 3.4A.5B "Gaming machine entitlement not personal property" | The venue operator | Transfer application administered by the VGCCC and determined by the Minister, with the outstanding balance paid out or the buyer taking over the deferred repayments | Another approved venue operator |
| Queensland | Yes, s 13A "Declaration for Commonwealth Act" | The licensee, as operating authorities | Authorised sale by the Queensland Public Trustee, by tender | Eligible licensees in the region the authority came from |
| South Australia | No equivalent declaration in the Act | The gaming machine licence holder | With the licence, or on the GMEX exchange | Licensees, and landlords or mortgagees carrying on the licensee's business |
| ACT | Yes, s 174A "Licences and authorisations etc are not personal property" | Not covered in this guide | Not covered in this guide | Not covered in this guide |
The rest of the security package still matters, and it is where most of the lender's protection sits when you are financing a pub or hotel.
If the entitlements cannot be mortgaged, what does the lender actually take security over?
When gaming entitlements cannot be mortgaged, the lender takes security over what it can legally control and sell: a first mortgage over the freehold where there is one, a general security agreement over the operating company's other assets, security over its shares, director guarantees, and loan covenants that the entitlements will not be sold, leased or surrendered without the lender's consent. The entitlements support the value of the venue without becoming separate collateral.
What a lender can hold
- A first mortgage over the freehold.
- Security over the operating company's other assets.
- Security over the shares in the licensee company.
- Guarantees from directors.
- Covenants that the entitlements stay with the venue.
- Consent rights over any transfer or lease.
What a lender cannot hold or rely on
- The entitlement itself, where a declaration applies.
- A guaranteed right to transfer.
- A buyer who is not an eligible venue.
- The full count after forfeiture on transfer.
- Value that depends on a licence that can end.
A commercial property loan secures the building. What a lender actually secures on a licensed freehold walks through the security schedule.
Can a private lender take gaming entitlements as security if a bank cannot?
No lender gets around the state gaming legislation simply because it is a private lender. Where the law declares the entitlement not to be personal property, a private lender cannot create a standalone PPSA security interest over it either. Private lending may still be possible against the freehold, another property, the business assets or a wider security package, but the entitlement itself does not become separately mortgageable because the lender is non-bank.
Finance for the gaming machines themselves is equipment finance, a different question from borrowing against the entitlements. In Victoria, a financier can lend for a machine purchase and register security over the machine, and on default can repossess it and sell it, but only to an approved venue operator (VGCCC, financing gaming machine purchases, read 25 September 2026).
What happens to the gaming entitlements if the loan defaults or a receiver is appointed?
On a default or receivership, gaming entitlements can leave the venue only through the state regulator, by an approved sale to another eligible venue. Part of the count or price is often lost on transfer, NSW sets a 12-month deadline once the hotel licence ends, and in Victoria every entitlement is forfeited to the State if the venue operator's licence ends.
- Keep the gaming licence alive, because in Victoria its cancellation, expiry or surrender forfeits every entitlement to the State (Gambling Regulation Act 2003, s 3.4A.26 "Gaming machine entitlements forfeited if venue operator's licence cancelled, surrendered or not renewed").
- Put in place a person the regulator will let run the business. South Australia expressly allows a mortgagee or receiver to do this (Gaming Machines Act 1992, s 28B "Devolution of licensee's rights" and s 28C "Bankruptcy or winding up of licensee"), with the Commissioner's permission.
- Sell the venue as a going concern, or sell the entitlements to an eligible buyer.
- Obtain the regulator's approval of the transfer.
- Absorb any forfeiture on transfer, or the share of the price paid to government.
NSW adds a clock. If the hotel licence is surrendered or cancelled, the entitlements must be transferred within 12 months or they are forfeited to the Authority, and a further period of up to 12 months can be bought by paying a levy on each entitlement (Gaming Machines Act 2001, s 23 "Transfer of gaming machine entitlements when hotel or club licence surrendered or cancelled", read 25 September 2026).
Scroll the table sideways to see every column.
| State | How a sale on default has to happen | What reduces what the lender recovers |
|---|---|---|
| NSW | Transfer to another hotel licence, approved by the Authority; if the hotel licence is surrendered or cancelled, within 12 months | Forfeited if not transferred within 12 months, with a further period of up to 12 months available on a levy per entitlement; one forfeited from each block of 2 or 3 transferred |
| Victoria | Transfer application determined by the Minister and recorded on the Entitlement Transfer Market Register; the outstanding balance is paid out or the buyer takes over the deferred repayments | Every entitlement forfeited to the State if the operator's licence is cancelled, expires or is surrendered, or if payment requirements are not followed, and on forfeiture the operator must still pay the State all amounts owing, including future entitlement payments; profit tax on a transfer above the allocation price |
| Queensland | Queensland Public Trustee tender, in the region of origin; the successful tenderer pays in full within five business days of acceptance | A share of the price paid into the Consolidated Fund, reduced from 33% to 15% under a trial to 30 June 2028 |
| South Australia | A mortgagee may carry on the business with the Commissioner's permission, or seek a temporary licence of up to 6 months, and trade on GMEX | A tiered number of extra entitlements must be offered on each sale, and part of them is cancelled |
The operator of a freehold hotel in South Australia walks away from the business. The freehold mortgagee applies for permission to carry on the business, then for a temporary licence, so the entitlements vest in a licence holder rather than stranding. It then sells the venue as a going concern, or trades the entitlements on GMEX, with the Commissioner's approval at each step.
The sale itself follows the usual going-concern path, set out in selling a pub as a going concern, and the buyer's lender will read the trade the same way we describe in how lenders read a pub's income streams.
How much are poker machine entitlements worth to a lender, and how are they valued?
Poker machine entitlements have a separate market value, with trade evidence from Queensland Public Trustee tenders, South Australia's GMEX and Victoria's Entitlement Transfer Market. Most lenders, though, count that value inside the venue's going-concern valuation and discount or ignore it where they cannot be sure of reaching it on a default.
Where does the price evidence come from?
Price evidence for gaming entitlements comes from Queensland Public Trustee tenders, South Australia's GMEX and Victoria's Entitlement Transfer Market. Two of those are published: the Queensland Public Trustee publishes a minimum acceptable price for each region at each tender, and the GMEX Public Register shows the number transferred and forfeited, the sale price and the council area for each approved South Australian trade. We do not repeat a price, a range or a per-entitlement figure here, because any number lifted out of one state, region and trading round would mislead in another; go to the current tender notice or register instead.
Sources, read 25 September 2026: Queensland Public Trustee gaming authorities tenders; Consumer and Business Services, GMEX and the GMEX Public Register. General information, not legal advice.Why do lenders usually count them inside the going concern?
The entitlements earn money only through the venue's gaming trade. So the valuer's going concern figure already carries their economic contribution, alongside the business's goodwill. How that figure turns into an advance is covered in going-concern valuation and what a lender advances.
Is the entitlement's market price the same as the value a lender will lend against?
No. There are three different concepts: the price an entitlement could trade for in the relevant state market, the income that entitlement helps the venue generate, and the amount of that value a lender is prepared to recognise in its security assessment. A lender does not normally add the entitlement's observable trading price on top of a going-concern valuation if that same economic benefit is already captured in the venue's earnings and valuation.
Assume a gaming hotel is valued at $6 million as a going concern and the gaming entitlements have observable trading value in that state. The lender does not automatically add the entitlement market price to $6 million and lend against the total. It asks whether the $6 million valuation already reflects the gaming income, whether the entitlements can stay with or be transferred from the venue, what is still owed on them, and how much value could actually be recovered after a default. The market price is evidence, not a second borrowing base.
What makes a lender discount them?
Lenders discount gaming entitlements for licence risk, forfeiture on transfer, money still owed to government, Victorian profit tax on a transfer above the allocation price, caps on where they can be used, and a lease that ends. It is the same pattern behind why lenders lend less on specialised property.
What supports the value
- Recent trades in the same region.
- A long-standing gaming licence.
- Clean transfer history.
- Gaming income that shows in the accounts.
What discounts it
- Forfeiture on transfer.
- An unpaid government balance.
- Victorian profit tax above the allocation price.
- A lease that ends soon.
- Gaming income the accounts cannot show.
From our broking desk: general observations from licensed venue deals, not a quote, offer or assessment of your venue. Reviewed 25 September 2026.
- When entitlements are offered as the extra security, the first credit question is not their value but whether the lender could ever reach them on a default.
- Business valuations done on a leasehold basis often do not value the entitlements separately, and a lender that wants that figure has to commission it.
- Credit teams ask for evidence that entitlements like these have actually traded, and in which region, before they give them any weight.
- Where a lender does take security, legal advice commonly treats the entitlements as caught by all-assets security over the operating company, not registered in their own right.
- We have not seen a lender offer a repeatable product that lends against entitlements on their own. Deals are assessed venue by venue.
Every lender sets its own policy, rules differ by state, and none of this predicts how your venue will be assessed.
A Victorian hotel owner refinancing a freehold venue asks the lender to add extra lending against the market value of its entitlements. The lender explains the entitlement cannot carry a security interest in Victoria, so it sizes the loan on the venue as a going concern. It then asks for the deferred-payment balance owed to the State and a covenant that the entitlements will not be transferred without consent, and makes both conditions of the loan.
When a bank will not count the trade, private lending is sometimes considered. The same questions in context: financing a freehold gaming venue.
Can you refinance, release equity or buy more entitlements?
Yes, you can refinance a gaming venue, release equity from it or borrow to buy more entitlements without the entitlements being separate security. The lender sizes the loan on the venue's security and going-concern value, and counts the entitlements through the gaming income they earn, which lifts both the valuation and the venue's ability to service the loan. It does not add a separate advance against the entitlements themselves.
That is why the trading accounts matter more than the entitlement count. Gaming income that shows cleanly in the accounts supports both the valuation and serviceability; gaming income the accounts cannot show supports neither. Lenders differ on how much of a venue's gaming income they will rely on, which is covered in how lenders read a pub's income streams, and the effect on a freehold loan is set out in how gaming entitlements affect pub and hotel finance.
Can you refinance a pub if the gaming entitlements are not separate security?
Yes. A refinance does not normally depend on the lender taking a standalone mortgage over the gaming entitlements. The lender assesses the freehold or leasehold security, the venue's going-concern value, gaming income, licence position, outstanding entitlement obligations and whether the entitlements will remain available to the venue after settlement. The refinance can therefore work even where the entitlement itself is not PPSA collateral.
What happens to the loan if you sell some gaming entitlements?
Selling entitlements can reduce both gaming income and the venue's going-concern value, so the lender may require consent before the sale and may reassess the facility. Depending on the loan terms and the resulting security position, sale proceeds may need to reduce the debt, covenants may be reset, or the lender may require an updated valuation. Do not assume that regulator approval by itself is enough to complete the sale while finance is in place.
Can you borrow to buy more entitlements?
You can borrow to buy more gaming entitlements, but the loan is secured on the venue, not on the entitlements being bought. The lender looks at whether the venue's security and trading support the extra debt, and the purchase still needs the regulator's approval in each state.
- NSW. A hotel's gaming machine threshold sets how many entitlements it can hold, and an increase to the threshold is a separate application to the Authority.
- Victoria. Both parties to a transfer must be approved venue operators, and profit tax can apply above the allocation price.
- Queensland. Operating authorities are bought through a Queensland Public Trustee tender in the region they came from. A successful tenderer must pay in full within five business days of acceptance, plus an administration fee and stamp duty on each authority, so the finance has to be approved before the bid goes in.
- South Australia. Entitlements are bought on GMEX. Once the Commissioner gives conditional approval to a trade, the parties have seven days to agree settlement terms and arrange payment.
The lender's approval and the regulator's process run separately, so line up the finance before you commit to a tender bid or a transfer price. The extra machines also need to earn enough to carry the extra repayments.
Sources, read 25 September 2026: NSW Government machine entitlements and permits page, modified 13 May 2026; VGCCC gaming entitlements page; Business Queensland operating authorities (hotels), updated 26 August 2026; Queensland Public Trustee current gaming machine tenders; SA Government trading gaming entitlements, updated 13 June 2025; DMAW Lawyers on GMEX trading. General information, not legal advice.Who owns the gaming entitlements in a leasehold hotel, and can they be sold or leased while the loan is in place?
In a leasehold hotel, the regulator records the gaming entitlements against the hotel licence the operator holds, but many hotel leases say the landlord owns them. Selling or leasing them while a loan is in place usually needs the lender's consent, the regulator's approval and a check of what the lease allows.
Who holds them under the licence, and who owns them under the lease?
NSW entitlements are held in respect of the hotel licence, and South Australian entitlements are held by the licence holder and move with the licence. Ownership as between landlord and tenant turns on the lease wording, so the lease matters as much as the licence; if the term is new, see what leasehold means. NSW transfer rules have historically required a hotel's entitlement transfer to be supported by each person with a financial interest in the hotel licence, which is one reason a lender reads the lease and any landlord deed before relying on the entitlements. Check the current position with your solicitor.
Could a landlord already have a PPSR registration over them?
In NSW, where the Act makes no not-personal-property declaration, a landlord may register its interest. A lender to the operator therefore searches the PPSR against the operator before relying on the entitlements. The risk runs the other way too: legal commentary on the Maiden Civil case suggests a landlord relying only on lease wording can lose priority to a tenant's lender that has registered on the PPSR (Bulford Legal on the PPSA and the hotel landlord). Treat all of this as a check to make before you offer the entitlements, not as a settled answer on the law.
- Check the regulator's record for the number of entitlements and the name of the recorded licence holder.
- Read the hotel lease for clauses dealing with ownership, transfer, surrender and what happens to the entitlements when the lease ends.
- Search the PPSR against the operating company and check whether the landlord or another secured party has registered an interest where the state law allows one to attach.
- Check for an existing entitlement lease, option or sale agreement that may restrict what can be transferred or valued.
- Check consent rights in the loan documents, landlord deed and lease so the transaction is not approved by one party but blocked by another.
- Check what happens if the operator changes because a buyer or receiver may need fresh regulator approval to keep operating the gaming business.
- Check the exit path if the lease ends or the borrower defaults, including who can keep the licence alive and who is entitled to sale proceeds.
- Do not value the entitlements in isolation until the lender or valuer is satisfied the borrower can actually retain, operate and transfer them.
Can NSW entitlements be leased out?
A NSW hotel with a gaming machine threshold of 10 or fewer can lease entitlements to another hotel, with the Authority's approval. The lease is not a transfer, so nothing is forfeited, but leased entitlements cannot be sold while the lease runs (Gaming Machines Act 2001, s 24 "Leasing of gaming machine entitlements permitted"; NSW Government gaming machine entitlements page, modified 13 May 2026, read 25 September 2026).
Do you need your lender's consent to sell or lease them?
Usually yes. Selling or leasing gaming entitlements normally has two separate gates: the gaming regulator must approve the transaction under the state's rules, and the loan documents may separately require the lender's consent. Regulator approval does not force the lender to consent, and lender consent does not guarantee regulator approval.
- The loan contract usually requires consent before the entitlement is sold or leased.
- The regulator must separately approve the transfer or lease.
- Sale proceeds may have to reduce the debt, depending on the facility terms and the resulting security position.
- Leasing or selling entitlements can reduce gaming income and the venue's going-concern valuation.
A NSW leasehold hotel with eight entitlements wants to lease three of them to another hotel for cash. It qualifies because its threshold is 10 or fewer, and because a lease is not a transfer nothing is forfeited, but the leased entitlements cannot be sold while the lease runs. The operator's lender must consent, the Authority must approve, the landlord's lease may have something to say about it, and the venue's gaming income and valuation fall for the term of the lease.
The wider trade-offs are in leasehold or freehold pub finance and in our guide to freehold going concern versus leasehold.
How do the gaming entitlement rules that affect a loan differ between states?
The state rules that most affect a loan against a gaming venue are how long the entitlements last, what is still owed to government, how many are lost on transfer, and who is allowed to buy them. Victorian entitlements run for 20 years from 16 August 2022, NSW forfeits one entitlement from each block transferred, Queensland takes a share of the sale price, and South Australia lets a mortgagee carry on the business.
- Victoria. New 20-year entitlements began on 16 August 2022, and hotels could pay by instalments over five years, with interest. On a transfer the outstanding balance is paid out or the buyer takes over the deferred repayments, and the transfer is administered by the VGCCC and determined by the Minister. Profit tax is payable on post-2022 entitlements transferred above the allocation price, and for the seller it is 100% of the difference. No premises may exceed 105 entitlements. Entitlements are forfeited if the operator's licence ends or if payment requirements are not followed, and forfeiture does not cancel the amounts still owed to the State. A hardship variation can postpone forfeiture by up to 6 months at a time.
- NSW. Entitlements transfer only to another hotel, and one in each block of 2 or 3 is forfeited. A country hotel can move no more than 2 blocks to a metropolitan hotel in any 12 months. Hotels can have up to 30 gaming machines, and there is a 12-month transfer window after a licence ends.
- Queensland. Operating authorities sell only through an authorised Queensland Public Trustee sale, in the region they came from, and the buyer pays in full within five business days of acceptance. A share of the price goes to the Consolidated Fund, reduced from 33% to 15% under a trial to 30 June 2028.
- South Australia. Entitlements trade on GMEX, where landlords and mortgagees carrying on the business can take part with the Commissioner's approval. A tiered number of extra entitlements must be offered on each sale, and a mortgagee can step in.
- ACT. Licences and authorisations are declared not personal property, so they cannot carry a security interest on their own.
Western Australia, the Northern Territory and Tasmania run different models and are not covered here.
Where the venue sits changes the lending conversation too, as regional and metro pub finance shows. The closest parallel outside hospitality is water entitlements, the same question on a farm. For a live deal, start with our pub and hotel lending.
What happens after you ask a lender about a gaming venue loan?
After you ask a lender about a gaming venue loan, it assesses the venue as a going concern and asks for the entitlement records, while you line up the regulator's approvals, because on a purchase or transfer settlement usually depends on both the loan approval and the regulator's sign-off.
- Gather the entitlement records, trading accounts and lease before you approach a lender, using the list below.
- The lender assesses the venue as a going concern, including how much of the gaming income it will rely on.
- Apply to the regulator. In Victoria, the application to take over a gaming venue asks for details that include the funding used to buy it, so the finance needs to be far enough along to disclose.
- The entitlement transfer is approved. In Victoria it is not final until the VGCCC records it on the Entitlement Transfer Market Register. Once a settlement date is scheduled, the VGCCC says it should be notified at least 14 working days before settlement. Buying entitlements on their own can run to tighter clocks, including five business days to pay after a Queensland tender is accepted.
- Settle, with the lender's conditions and the regulator's approvals both in place.
Scroll the table sideways to see every column.
| Situation | Published clock | Why it matters to the finance |
|---|---|---|
| Victorian venue settlement | Notify the VGCCC at least 14 working days before settlement once the date is scheduled | A late regulator step can stop the transaction from settling cleanly or interrupt lawful gaming operations |
| Queensland hotel operating-authority tender | Successful tenderers must pay in full within five business days under the tender conditions | The acquisition finance needs to be arranged before the bid is made |
| NSW licence surrendered or cancelled | Transfer remaining entitlements within 12 months, with a further period of up to 12 months available on payment of the statutory levy | A receiver or lender cannot treat the entitlements as value that can sit indefinitely after the licence ends |
| Victorian serious financial hardship | An approved variation can postpone forfeiture by up to 6 months per variation | Refinance or restructuring work needs to start before the entitlement position becomes irreversible |
Timing matters as much as the paperwork, which is covered in settling a pub purchase on time, and if you are buying your first venue, start with what first-time pub buyers should know.
What will a lender ask to see about your gaming entitlements?
A lender will ask to see the regulator's record of how many gaming entitlements you hold and in whose name, what is still owed on them to government, whether any are leased, optioned or part-way through a transfer, and trading accounts showing how much of the venue's income comes from gaming.
- The regulator's record of entitlements held, and the holder's name.
- In Victoria, the deferred-payment agreement and the balance still owed.
- Any entitlement lease, option or sale agreement.
- Any transfer approval in progress.
- Trading accounts that separate gaming income from bar, food and accommodation.
- The liquor and gaming licences and approvals.
- For a leasehold venue, the lease, including any clause on who owns the entitlements.
- If you are refinancing, the current facility limit, payout figure, repayment history and any covenant or consent requirement affecting entitlement transfers.
- If you plan to buy or sell entitlements, the proposed price, regulator application status and a before-and-after forecast showing the effect on gaming income and debt service.
How a pub purchase is labelled changes how it is financed, as set out in how a pub purchase is labelled and financed, and the whole purchase is set out in the full pub and hotel finance guide.
Gaming machine entitlements are valuable, but in Victoria, Queensland and the ACT the law says they are not personal property, and in every state their value moves only through a regulator-approved transfer. So lenders protect themselves by securing the freehold, the operating company, its shares and the directors, and by writing consent covenants into the loan contract, then count the entitlements inside the going-concern valuation rather than lending against a market price. On default the regulator's rules decide what the lender can recover: forfeiture on transfer, a transfer clock in NSW, loss to the State in Victoria if the licence ends, and a share of the price to government in Queensland. If you are buying, run the lender's assessment and the regulator's approvals side by side; if you are under pressure, act before the licence or the payment terms are at risk.
Key takeaway: the practical lending question is not just what an entitlement is worth. It is what the lender can legally secure, how much gaming income the venue keeps, whether the regulator will allow the transfer, and how much value is still recoverable if the deal goes wrong.Frequently asked questions about gaming machine entitlements as loan security
Yes, but not against the entitlements on their own. In Victoria, Queensland and the ACT the law says they are not personal property. In NSW and South Australia the Act makes no such declaration, but a lender still reaches their value only through the venue and a regulator-approved transfer, so lenders secure the venue and control the licence instead.
A gaming machine entitlement is a state-issued right to operate one gaming machine at an approved venue. It is not the machine itself. Entitlements are capped, tradeable within strict rules, and regulated separately in each state.
It depends on the state. Victoria, Queensland and the ACT declare them not to be personal property, so the PPSA does not apply and they cannot be registered on the PPSR as standalone collateral. NSW and South Australia contain no equivalent declaration, and whether a security interest attaches there, and how it ranks, is a question for your solicitor.
They can only be sold to another eligible venue with the regulator's approval. In NSW they must be transferred within 12 months of the hotel licence ending, in Victoria they are forfeited if the operator's licence ends, and in South Australia a receiver or mortgagee can carry on the business to keep them alive.
Yes. Post-2022 Victorian entitlements run for 20 years from 16 August 2022. They are also forfeited to the State earlier if the venue operator's licence is cancelled, expires or is surrendered, or if payment requirements are not followed.
Entitlements can be forfeited if payment requirements are not followed, and forfeiture does not cancel what is owed to the State. A venue operator in serious financial hardship can apply to vary its payment agreement, which can postpone forfeiture by up to 6 months per variation, supported by financial statements, loan details and evidence of attempts to obtain finance elsewhere.
Not above the allocation price. Profit tax is payable on post-2022 Victorian entitlements transferred at a price higher than the allocation price, and for the seller it is 100% of the difference between the allocation price and the transfer price. Ask your accountant how it applies to your sale.
Poker machine entitlements have no single price: value depends on the state, the region and the most recent trading round. The best evidence is recent results from Queensland Public Trustee tenders, South Australia's GMEX and Victoria's Entitlement Transfer Market. A lender usually counts that value through the venue's trading rather than lending against a market price.
Usually, but indirectly. A lender counts gaming entitlements through the gaming income they earn, which lifts the venue's going-concern valuation and its ability to service the loan. It does not add a separate advance against the entitlements themselves, and lenders differ on how much gaming income they will rely on.
Yes, but the loan is secured on the venue, not on the entitlements being bought. The lender looks at whether the venue's security and trading support the extra debt, and the purchase still needs the regulator's approval in each state. In Queensland a successful tenderer must pay in full within five business days, so the finance has to be approved before the bid.
The regulator records them against the hotel licence the operator holds, but many hotel leases say the landlord owns them. Check the lease, and in NSW search the PPSR for a landlord's registration before relying on them.
Yes, if your hotel's gaming machine threshold is 10 or fewer, and only to another hotel with the regulator's approval. A lease is not a transfer, so nothing is forfeited, but leased entitlements cannot be sold while the lease runs.
Usually yes. Selling or leasing gaming entitlements normally has two separate gates: the regulator must approve the transaction under the state's rules, and the loan documents may separately require the lender's consent. Regulator approval does not force the lender to consent, and lender consent does not guarantee regulator approval. The lender may also require debt reduction, an updated valuation or revised facility terms. Selling entitlements can reduce gaming income and the venue's going-concern value, which is why the lender may reassess the facility.
No. Gaming machine finance funds the physical machines as equipment, and a financier can take security over the machines; in Victoria a financier can repossess a machine on default but can sell it only to an approved venue operator. Borrowing against entitlements means relying on the right to operate them, which Victoria, Queensland and the ACT do not let a lender secure on its own.
A private lender is subject to the same state gaming legislation. Where an entitlement is declared not to be personal property, the private lender cannot create standalone PPSA security over it either. Private finance may instead be secured by the freehold, another property, the business assets or a broader security package.
Usually not as a simple add-on. A going-concern valuation may already reflect the gaming income the entitlements support. The lender then decides how much of that value it will recognise after considering licence risk, transfer rules, forfeiture, outstanding government balances and what could actually be recovered on default.
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