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:

 "(3) Except as provided by subsections (4) and (9) of this section, in respect of any one game played by means of the machine no player or person claiming under a player shall receive, or shall be entitled to receive, any article, benefit or advantage other than one (and only one) of the following, that is to say--


  (a) a money prize not exceeding [£3] or a token which is, or two or more tokens which in the aggregate are, exchangeable only for such a money prize;

  (b) a non-monetary prize or prizes of a value or aggregate value not exceeding [£6] or a token exchangeable only for such a non-monetary prize or such non-monetary prizes;

  (c) a money prize not exceeding [£3] together with a non- monetary prize of a value which does not exceed [£6] less the amount of the money prize, or a token exchangeable only for such a combination of a money prize and a non- monetary prize;

  (d) one or more tokens which can be used for playing one or more further games by means of the machine and, in so far as they are not so used, can be exchanged for a non-monetary prize or non-monetary prizes at the appropriate rate."

    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) one or more tokens which can be used for playing one or more further games by means of the machine and, in so far as they are not so used, can be exchanged for a non-monetary prize or non-monetary prizes at the appropriate rate."

    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.