FEDERAL COURT OF AUSTRALIA
Guy v Crown Melbourne Limited (No 2) [2018] FCA 36
ORDERS
|
Applicant | ||
|
AND: |
CROWN MELBOURNE LIMITED (ACN 006 973 262) First Respondent ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715) Second Respondent | |
|
DATE OF ORDER: |
2 february 2018 |
THE COURT ORDERS THAT:
1. The application be dismissed.
THE COURT DIRECTS THAT:
2. The parties file a joint minute of proposed orders reflecting the Court’s reasons in relation to the s 37AF application, including proposed orders concerning the filing of a generally accessible Court Book, by 4 pm on 9 February 2018.
3. If the parties agree on appropriate orders for costs, and (if applicable) on any lump sum figures for costs, they are to file a joint minute of proposed orders on or before 4 pm on 16 February 2018.
4. In the absence of any joint proposed orders pursuant to paragraph 3 of these orders, on or before 4 pm on 2 March 2018, the parties are to file and serve submissions, limited to five pages, on appropriate orders for costs, including whether any costs orders should be made by way of a lump sum and if so, how that lump sum should be determined.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
|
[6] | |
|
Gambling on poker machines: a brief introduction |
[8] |
|
Crown’s business |
[18] |
|
Aristocrat’s business |
[21] |
|
The applicant and her lay witnesses (other than Dr Charles Livingstone) |
[25] |
|
The Dolphin Treasure EGM |
[47] |
|
The appearance of the Dolphin Treasure |
[51] |
|
The way the Dolphin Treasure functions: in general |
[71] |
|
The way the Dolphin Treasure functions: variation in the number of symbols on each reel |
[84] |
|
The way the Dolphin Treasure functions: variation in the frequency of symbols |
[88] |
|
The evidence about which witnesses have played the Dolphin Treasure |
[93] |
|
RELEVANT LEGISLATIVE PROVISIONS |
[97] |
|
The relevant ACL contravention provisions |
[97] |
|
The regulation of gambling in Victoria |
[104] |
|
THE APPLICANT’S ALLEGATIONS |
[146] |
|
The s 18 claim |
[147] |
|
The Equal Reel Size Representation |
[153] |
|
The Equal Symbol Distribution Representation |
[155] |
|
The Risk Representation |
[157] |
|
Members of the class to whom representations are said to be made |
[160] |
|
The s 18 claim as against Crown |
[161] |
|
The s 18 claim as against Aristocrat |
[165] |
|
The ss 20 and 21 claims |
[167] |
|
The s 20 claim against Crown |
[173] |
|
The s 20 claim against Aristocrat |
[174] |
|
The s 21 claim against Crown |
[176] |
|
The s 21 claim against Aristocrat |
[178] |
|
THE RESPONDENT’S OVERARCHING ARGUMENTS |
[180] |
|
CROWN’S RESPONSE TO THE INDIVIDUAL ALLEGATIONS |
[187] |
|
To the s 18 claim |
[187] |
|
To the s 20 claim |
[196] |
|
To the s 21 claim |
[205] |
|
The s 131C argument |
[209] |
|
ARISTOCRAT’S RESPONSE TO THE INDIVIDUAL ALLEGATIONS |
[211] |
|
To the s 18 claim |
[211] |
|
To the s 20 claim |
[217] |
|
To the s 21 claim |
[225] |
|
Aristocrat’s “formal” submissions |
[229] |
|
THE EVIDENCE |
[232] |
|
Applicant |
[233] |
|
Crown |
[238] |
|
Aristocrat |
[240] |
|
The joint expert report |
[242] |
|
The documentary evidence |
[243] |
|
The Court’s view at Crown Casino |
[246] |
|
Confidentiality orders |
[249] |
|
Ruling on the proposed s 37AF orders |
[263] |
|
THE EXPERT EVIDENCE AND THE CONCURRENT SESSION |
[273] |
|
My approach to the expert evidence |
[276] |
|
Professor Yücel |
[288] |
|
RESOLUTION |
[304] |
|
A general observation about my approach to the parties’ arguments |
[308] |
|
A general finding on the applicant’s claims |
[311] |
|
THE SECTION 18 CLAIM |
[325] |
|
What I accept from the applicant’s case |
[325] |
|
The class issue |
[329] |
|
How the view fits in with the constructed hypothetical gambler |
[346] |
|
The Equal Reel Size Representation |
[350] |
|
Even Reel Image |
[351] |
|
Spinning Reel Sound |
[353] |
|
Dispersed Symbols Image |
[355] |
|
The Equal Symbol Distribution Representation |
[357] |
|
Even Reel Image |
[358] |
|
Spinning Reel Sound |
[359] |
|
Dispersed Symbols Image |
[360] |
|
A submission relevant to both representations |
[364] |
|
The function of the “oversize” reel feature and the “starved reel” feature |
[365] |
|
The applicant’s reliance on “near misses” |
[387] |
|
The Risk Representation |
[392] |
|
Nature and function of the RTP |
[392] |
|
The alleged Risk representation is made |
[412] |
|
The Risk representation may be confusing but is not misleading |
[423] |
|
The s 18 claim as against Crown |
[447] |
|
The s 18 claim as against Aristocrat |
[456] |
|
THE UNCONSCIONABILITY CLAIMS |
[460] |
|
General findings |
[461] |
|
The pleaded class: “Vulnerable Players” |
[464] |
|
Summary of my conclusions |
[476] |
|
The section 20 claim |
[478] |
|
No “special disadvantage” established |
[485] |
|
The section 21 claim |
[507] |
|
None of the impugned conduct has the necessary unconscionable quality |
[507] |
|
Rejection of Aristocrat’s separate submission under s 21 |
[529] |
|
The introduction of near misses into the ss 20 and 21 cases |
[531] |
|
CONCLUSIONS ON THE APPLICANT’S CAUSES OF ACTION |
[537] |
|
WHAT IS NOT DECIDED |
[539] |
|
The interrelationship between the ACL and the regulatory scheme in relation to gambling |
[539] |
|
The role of cognitive factors in gambling disorders and in those with difficulty controlling their gambling |
[542] |
|
The “contribution” of the identified features of the Dolphin Treasure EGM to the development or persistence of gambling disorder, or difficulties in controlling gambling activity |
[546] |
|
Accessorial liability of Aristocrat |
[551] |
|
Implications of findings of contravention |
[552] |
|
Appropriate relief |
[553] |
|
ORDERS AND COSTS |
[554] |
REASONS FOR JUDGMENT
MORTIMER J:
1 This case is about selected aspects of what happens when people gamble on poker machines. Whether or not one views the expenditure of money on various games of chance as a desirable or enjoyable activity or not, in this proceeding it is inappropriate to adhere to the language of a “game” and “players”. That language hides or minimises a number of matters: the inherent nature of the activity, the heavy commercialisation of poker machine gambling, the sophisticated inputs by manufacturers into the design of poker machines, the intensive regulation of these kinds of activities, and the harm done to significant numbers of people who gamble on poker machines, and to their families and loved ones.
2 Aristocrat’s closing submissions referred to the language used by Latham CJ in R v Connare; Ex parte Wawn [1939] HCA 18; 61 CLR 596 at 610, to describe his own views that “all lotteries [are]… a moral pestilence”. However, his Honour recognised he could not give effect to those views in exercising judicial power in the case before him. Notwithstanding my view that the Court should not shy away from characterising this case as about gambling activities, rather than “playing” a “game”, it is no part of the Court’s task in this case to characterise gambling as a desirable, or undesirable, activity, nor to engage with policy decisions made by the executive and legislative branches of government about whether those activities should be lawful and if so, in what circumstances.
3 The proceeding concerns one particular kind of poker machine: an electronic gaming machine called the Dolphin Treasure. In these reasons I describe it as the Dolphin Treasure EGM. It is a kind of poker machine found quite commonly in many poker machine venues, and at the time of trial there were 38 such machines on the floor at Crown Casino. The applicant, Ms Shonica Guy, alleges that both respondents, Crown Melbourne Ltd and Aristocrat Technologies Australia Pty Ltd, have contravened the provisions of s 18 and ss 20 and/or 21 of the Australian Consumer Law (Cth), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). For the purposes of s 18 of the ACL (and I return to the details of the claims below), it is alleged they have contravened that provision because in designing the software for, and supplying, the Dolphin Treasure (Aristocrat) and in making the Dolphin Treasure with certain features available to the gambling public (Crown), both respondents have misled the gambling public about the odds of winning they enjoy when they gamble on the machines. The applicant also alleges contravention of s 52 of the Trade Practices Act 1974 (Cth), the predecessor to s 18 of the ACL.
4 For the purposes of ss 20 and 21 of the ACL, it is alleged the respondents have contravened those provisions because in designing the software for, and supplying, the Dolphin Treasure (Aristocrat) and in making the Dolphin Treasure with certain features available to the gambling public (Crown), both respondents have played on the vulnerabilities of a subsection of the gambling public at risk of developing a gambling disorder, or becoming “problem gamblers” by misinforming them about their odds of winning and by encouraging them into chasing further “wins”, especially through the way the Dolphin Treasure rewards gamblers when they “win” less than the amount they have bet.
5 I have concluded that the applicant has not proven her allegations and, for the reasons set out below, the application must be dismissed. I have reached that conclusion in a way which means there are a number of arguments raised by the parties which I have found it unnecessary to decide. These matters are summarised at [539] to [553] below.
A summary of the factual context for this proceeding
6 The applicant’s claims are limited to what occurs during the playing of the Dolphin Treasure EGM. Before turning to the detail of the claims, it is necessary to set out some more general background and context, as all parties relied on these matters to advance their arguments.
7 What I set out in this section constitutes my findings of fact on these matters of background and context, and my findings about the Dolphin Treasure EGM. My findings of fact as they relate more specifically the ACL claims are set out later in these reasons.
Gambling on poker machines: a brief introduction
8 A useful starting point for considering the history of poker machines is the Report of the Board of Inquiry into Poker Machines, an inquiry which was led by the Honourable Murray Wilcox QC, a former judge of this Court. That Report was presented to the Governor of Victoria on 28 November 1983. The terms of reference for that inquiry were to inquire into, report on and make recommendations on whether poker machines should be permitted in Victoria. By the time the Wilcox Report was commissioned, poker machines were already available in other jurisdictions, such as in New South Wales and the Australian Capital Territory. The Wilcox Report contains an introduction to the history of poker machines. The whole of the Wilcox Report was admitted into evidence, and I did not understand its recitation of the history of poker machines to be the subject of any dispute between the parties. It is a useful, relevant and objective source to provide some context to the issues raised in this proceeding.
9 According to the Wilcox Report, the “poker machine” was invented by Charles Fey, a Californian mechanic, in 1887 or 1895, depending on the source one consults. That particular machine was called “The Liberty Bell”, and consisted of three reels, each with ten symbols. As described by Mr Wilcox, the machine operated by a player putting in a 5 cent coin which:
…when placed in a slot in the machine, enabled the player to pull the handle thereby causing the reels to rotate. If a winning combination was showing in the window when the reels stopped the machine paid out a predetermined number of coins.
10 As the use of Mr Fey’s “slot” machines became widespread, different versions of the machine appeared under different names. “Fruit machines” featured oranges, cherries, and other fruit symbols, “jackpot machines” featured large jackpots, and “poker machines” featured playing card faces. At the time of Mr Wilcox’s Report, outside Australia, such machines were almost universally known as “slot machines” or “slots”. In Australia, a difference in perception between “fruit machines” and “poker machines” had emerged by the 1930s. According to the Report:
It appears that many of the early Australian machines were principally of the “fruit” variety. The odium which attached to these machines following a Royal Commission in 1932… led a New South Wales cabinet minister to make the absurd statement that whilst “fruit machines” were illegal in registered clubs, “poker machines” were not.
11 Mr Wilcox traces the acceptance of the term “poker machines” to this period in time. In New South Wales, the legalisation of such machines in 1956 used the term “poker machines” to apply to all slot machines. That term then became enshrined in legislation as the Australian descriptor for slot machines.
12 Due to factors such as the ability for gamblers to “cheat” or manipulate early versions of the poker machines, as well as the need for the machine to return amounts to gamblers more accurately, by the 1960s mechanical poker machines began to be superseded. The successor was an “electro-mechanical” machine, which became the general machine available in New South Wales in the 1970s.
13 In the late 1970s, a “microprocessor” machine was developed, which used a modern microprocessor or mini-computer. According to the Wilcox Report, such machines went some way to reduce gamblers’ interference with the payouts of the machines.
14 Evidence about the development of modern EGMs was given in this proceeding by Ms Natalie Bryant, who is the Executive Producer and Special Projects for Aristocrat. Ms Bryant has been employed by Aristocrat for more than 20 years in various “game” designer and development-type roles. Although the chronology is not entirely clear, Ms Bryant’s uncontested evidence is that the next developmental stage was the introduction of computerised “stepper” EGMs, where EGMs with physical reels were controlled by a computer running a random number generator. It may be that these are related to the “electro-mechanical” or “microprocessor” machine described in Mr Wilcox’s Report, although this was not clear on the evidence. The modern EGMs, such as the Dolphin Treasure EGM, then followed these “stepper” machines. Modern EGMs, such as the Dolphin Treasure “in nearly all cases” involve video screens, on which animated spinning reels are displayed. Thus one of the key components of the functioning of the original slot machine – spinning reels – is now a computer generated illusion. Nevertheless, the importance of this component to the attraction that poker machines have for those who gamble on them means this the spinning “reel” retains its visual prominence in modern poker machines.
15 Despite the considerable history of poker machines in NSW, the Wilcox Report recommended against the introduction of poker machines in Victoria. However, in 1991, the then Premier of Victoria, Ms Joan Kirner AC, announced that EGMs would be allowed into licensed clubs and hotels. Subsequently, the Gaming Machine Control Bill 1991 (Vic) passed the Legislative Assembly and Council on 8 October 1991, and received Royal Assent on 15 October 1991, legalising and regulating poker machines in Victoria.
16 That policy decision was controversial at the time it was made, and as the evidence in this proceeding demonstrates, it remains so.
17 It is not disputed that EGMs are now widely available across a range of venues in Victoria, including in licensed hotels, clubs and of course Crown Casino. According to the Victorian Commission for Gambling and Liquor Regulation’s 2015-2016 Annual Report, which is in evidence, the total number of EGMs authorised in Victoria as at 30 June 2016 was 27,011.
Crown’s business
18 Crown is an incorporated entity licensed to operate a casino at Southbank in Victoria, pursuant to the Casino Control Act 1991 (Vic), referred to in these reasons as Crown Casino. Among other activities, Crown operates and makes available for play to the public EGMs at that venue.
19 Under the Casino Control Act, Crown is licensed to operate 2,628 EGMs, and as at 16 November 2016, it had 38 Dolphin Treasure EGMs available for play on the gaming floor at Crown Casino. It is not disputed by the applicant that Crown only makes available for play by the public those machines which the Victorian Commission for Gambling Regulation or its successor, the Victorian Commission for Gambling and Liquor Regulation, has approved in writing for use at Crown Casino. I return later in these reasons to what the process of approval entails, as well as to the gambling regulations and standards to which Crown is subject.
20 The Dolphin Treasure EGMs are manufactured and supplied by Aristocrat to Crown, for the purposes of being made available for play at the Crown Casino floor. The nature of the business relationship between Aristocrat and Crown in relation to the supply of Dolphin Treasure EGMs was contested in some aspects.
Aristocrat’s business
21 Aristocrat is an incorporated entity listed on the Roll of Manufacturers, Suppliers and Testers maintained by the Victorian Commission for Gambling and Liquor Regulation pursuant to s 3.4.60(1) of the Gambling Regulation Act 2003 (Vic). It carries on the business of manufacturing and supplying hardware and software for EGMs, including manufacture and supply of the Dolphin Treasure EGM. It has a business relationship with Crown in that it supplies EGMs to Crown, to be made available to the public. In this sense and in the context of this proceeding, Aristocrat does not interact directly with members of the public who use the Dolphin Treasure EGM at Crown Casino.
22 According to evidence given by Ms Bryant, Aristocrat’s game design division contains a number of groups. Her evidence about this, which was not contested, is that Aristocrat’s Design and Development division is subdivided into game studios, technical support studios, and engineering. Game studios design and develop individual poker machines. The technical support studios include several smaller technical teams dealing with software development. The Design and Development division also has a Compliance Group which includes teams handling the communication with regulators and authorised testing facilities.
23 One such game studio situated in the Design and Development division is Oz Studios, the studio within which Ms Bryant works. There are approximately 170 people working in Oz Studios, five of whom are Executive Producers, who work with a multidisciplinary team, including mathematicians, art designers, software developers, and software testers.
24 Aristocrat’s business in the manufacture and supply of poker machines is subject to a number of different regulations, including in relation to how machines are designed, what information they must display, down to the amount of time it takes for a reel to spin. I discuss these regulations in further detail at [104] below.
The applicant and her lay witnesses (other than Dr Charles Livingstone)
25 The applicant filed affidavits from six lay witnesses (excluding an affidavit of Dr Charles Livingstone, which I discuss later in these reasons), each of whom gave evidence about their gambling history with poker machines. None of the applicant’s lay evidence is contested, although Crown and Aristocrat make submissions as to the weight that should be accorded to them, and its relevance. None of the lay witnesses were cross-examined.
26 At [95] below, I set out the details of which lay witnesses had played the Dolphin Treasure EGM and in what circumstances.
27 The applicant, Ms Shonica Guy, is a volunteer coordinator at Pokies Anonymous and Gambling Link Support Group. She gave evidence about her own history of gambling and what she describes as her problem gambling. Like the other lay witnesses, Ms Guy deposed that she was introduced to EGMs, and, over time, began spending a significant amount of time on the machines. From about 1995, she began going to the Windsor Hotel in Windsor Gardens, Adelaide, fortnightly, to play on EGMs. She was unemployed and on social security payments at the time, and spent all her “free” money on the EGMs. Eventually she began playing on the Dolphin Treasure EGM, drawn to it by the graphics and by the chance to win “free spins”. Initially, she wanted to win free spins in order to win more money, but she deposes that eventually, she wanted to win free spins so that she could stay longer on the machine. The “free spin” feature of EGMs generally was described by almost all lay witnesses as a feature which drew them to particular EGMs having this feature: Ms Libby Mitchell, Ms Anna Bardsley, Ms Conny McLaughlin, Mr Robert Ingmire, and Ms Guy all described the importance of this feature to their gambling habits.
28 Ms Guy’s evidence was that she felt more in control when she was playing the Dolphin Treasure EGM compared to other machines. Like other lay witnesses, she felt that she would “enter a zone” when playing the EGMs, and that she would “not think of much else”. She would stay at the venue until she had no more money to gamble that day.
29 Ms Guy also gave evidence as to her betting preferences. She said that she would:
…usually bet the second highest amount for the multi-lining permitted by the machine but this would fluctuate. If I had just won anything at all on any one spin I felt like I was lucky and would usually bet the maximum multi-lining amount on the next spin.
30 That was until she was low on credits, at which point she would alter her gambling style and gamble conservatively. Ms McLaughlin gave similar evidence about her preference for multi-line betting, deposing:
I always played on multiple lines at the pokies. I thought that improved my chances of winning. If my husband was ever with me I would tell him off for playing one line. I told him you need to play them all.
31 This preference for multi-line betting was also the case for Ms Mitchell and Mr Ingmire.
32 Ms Guy also described how she felt when gambling on EGMs:
I felt a rush of adrenaline upon entering a gambling venue. I became so anxious to get to my machine that I would notice which change machine would drop coins out faster. I would hope that no one was on my machine. When someone was, I would think “Get out of my way!” I would sit on the machine next to the one I wanted and wait, betting on a machine that I didn’t even want to be on.
Once I got into the venue and sat down at my poker machine, I was relieved. I would relax at the start, but would worry as I lost more money and the amount I had left got close to $10.
33 She described that the length of time she spent at a venue correlated with the amount of money she had. A typical session for Ms Guy lasted four hours, and she recalled once spending $1,200 in one session.
34 Ms Guy described how it was in 2006 that she began to wonder whether she had a gambling problem, and visited a financial planner and gambling counselling service. She subsequently declared bankruptcy voluntarily in 2009, and then began to research problem gambling and addiction in greater detail.
35 The experience of Ms Guy is reflected in the other lay witnesses. Each of them deposed to their experiences with EGMs, and how it was that they came to play EGMs, or how they returned to playing EGMs after trying to quit. Some of the witnesses gave evidence that the time they started playing pokies more regularly coincided with stressful times in their lives. Ms Bardsley deposed to playing EGMs by herself in order to “zone out” of her personal and family problems. Ms Mitchell deposed that, after quitting EGMs, she “relapse[d]” when she experienced new personal stresses in her life.
36 Like Ms Guy, other lay witnesses described the calming feeling of playing EGMs and of “zoning out”. Ms Bardsley described how she wanted “to prolong the time I could spend at the machine,” that she:
…was drawn to the lights and sounds the machines emitted and found them to be spellbinding. I would zone out when using the machines. This allowed me some respite from the amount of stress I felt I was under in my personal life. I felt I deserved a break from the stress I felt under.
I found the sounds and visuals of the machines soothing. I felt that I was searching for this. I recall that on hearing the jingles they played, I felt special. I felt like I was getting an adrenaline rush upon seeing the lights and sounds of poker machines and would feel agitated if I didn’t play the poker machine.
My agitation would subside when I started playing on a machine. I would also feel a rush of anticipation with every push of the machine. I would drag my finger across symbols as if I were pulling the reels to my desired position.
37 Similarly, Ms Catherine Sommerville described how she “became absorbed in whatever machine I was playing while I played it. I was mesmerised by the ritual of playing: the images, sounds, lights and anticipation. It felt hypnotic.” For her, making money was not her primary motivation for playing EGMs, “[p]laying was my motivation for playing”. Mr Ingmire also described that he felt like he was “hypnotised”, and that he was on “autopilot” when playing. Ms Mitchell described the “relaxing” experience as “like blitzing your mind”.
38 Ms McLaughlin described that when she played poker machines, she “felt like I was escaping the mundane troubles in my life… I didn’t have to worry about the husband, kids, work, bills or anything. Going to the pokie venue felt automatic.”
39 Some witnesses described being drawn in to venues to play EGMs, even when they were on their way elsewhere. Ms Bardsley deposed:
I would leave for appointments early to allow myself time to gamble or would attend venues on the way home. I felt that I was almost unable to drive past a signed poker machine venue. I would often make excuses to myself to justify entering venues such as needing to use their bathrooms or wanting a cup of coffee. On these occasions I would always end up using the pokies.
40 Ms Sommerville described her “compulsion” to play as so strong that she would go to a pokies venue during the day, when she was meant to be at work.
41 As with Ms Guy, all lay witnesses described how they spent significant periods of time gambling on EGMs, losing a great deal of money in one session. Ms Bardsley described spending three to four hours at a time gambling on EGMs, but that sometimes she would gamble for seven to eight hours. She would always spend hundreds of dollars in one session, and would withdraw money from an ATM if her money was exhausted too quickly. Ms Sommerville described how she “couldn’t stop playing” and how she spent all of her disposable money over the course of a few months on EGMs. She sold her car to finance her gambling. She described how she would sometimes wait until midnight so that the daily limit on her ATM withdrawals would reset. Ms McLaughlin described how she went from playing 30 minutes at a time, to playing three hour sessions, if not longer, playing until she had no more money that day.
42 Perhaps most significantly, Ms Mitchell described how she would sometimes be at a venue for 24 hours in one session. She stopped a session when she ran out of money, when the venue closed, or when she was “totally exhausted”.
43 Some lay witnesses described the feeling of being ashamed of their gambling habits. Ms Bardsley deposed that she would move between gambling venues, as she was “ashamed of being seen too often at the one venue. I did not want people, including venue staff, to know that I had a problem.” She would also lie to others about where she had been. Ms Mitchell described how she was “highly embarrassed” as she was a home economist but felt that she could not manage her own budget.
44 Each lay witness also described how they sought to stop their gambling. Mr Ingmire in particular, deposed that he signed himself up to the Australian Hotel Association’s self-exclusion program, slowly adding more and more venues to the self-exclusion list. He eventually asked to be excluded from venues in the whole of Victoria, but was informed that this was too difficult.
45 Like Ms Guy, all lay witnesses described how gambling has adversely affected their lives. All witnesses described the significant financial losses, to varying degrees. Financial losses were significant for all witnesses who could put a dollar amount on their losses – Ms Laughlin estimates that she lost $350,000; Mr Ingmire estimates he lost $360,000. All described the emotional and mental impact of gambling on them, and on their families and loved ones. Ms Sommerville described how her relationship broke down, and how she closed herself off from her family. Ms Mitchell described her loss of social interaction, how she lost the ability and desire to interact with others. Mr Ingmire described losing his relationship and his house.
46 I accept the evidence of these lay witnesses reflects their experience with gambling on poker machines, including but not limited to the Dolphin Treasure EGM. I address the relevance and weight of this evidence to the applicant’s claims in the resolution section below.
The Dolphin Treasure EGM
47 The Dolphin Treasure EGM is a type of modern EGM (described at [14] above) designed and manufactured by Aristocrat, with virtual, rather than mechanical, “reels”. Ms Bryant gave evidence about the history and development of the machine, which I accept. The Dolphin Treasure was first released in approximately 1997. Since then, a number of different versions have been made by Aristocrat. These different versions were developed for a range of reasons, including to allow the use of different credit denominations, computing advances in relation to graphics and animation, and changes to regulatory requirements. Other Aristocrat poker machines use the same mathematics as Dolphin Treasure, but have different names and themes. Ms Bryant deposed that such poker machine games are referred to as “clones” – for instance, the EGM “Queen of the Nile” is a clone of Dolphin Treasure.
48 It is apparent from the evidence that the Dolphin Treasure is a popular style of poker machine, and somewhat traditional in its style. Some of the applicant’s lay witnesses described it as their favourite machine. What led to the choice by the applicant and her legal representatives of the Dolphin Treasure as the poker machine which is the subject of the claims made in this proceeding is not relevant to the Court’s determination of the issues in this proceeding, however it can safely be said that it is a popular and relatively common machine. Ms Bryant also described the Dolphin Treasure EGM as a “long-standing and successful” EGM for Aristocrat.
49 I note that the impugned Dolphin Treasure EGM excludes an EGM known as “Dolphin Treasure Legends” when played in “Deluxe” mode, which has different components and rules to the pleaded Dolphin Treasure EGM.
50 As the respondents emphasised, this proceeding concerns only the 38 Dolphin Treasure EGMs which were on the floor at Crown Casino as at the time of trial. Thirty-two of those machines were licensed by Crown from Aristocrat under a “time on floor” arrangement, which is a monthly licence, while the remaining six were owned outright by Crown. If the difference between the ownership arrangements for the thirty-two machines, as opposed to the six owned by Crown might have been material, given the conclusions I have reached, it is now not of any legal or factual significance to the outcome of the applicant’s claims. The Court was not directed to any evidence (if it exists in the more than 40,000 pages of evidence before the Court) as to how many Dolphin Treasure EGMs are manufactured and supplied by Aristocrat across Australia.
The appearance of the Dolphin Treasure
51 In this section I set out the basic appearance and features of the Dolphin Treasure EGM visible to a gambler. The facts set out here are not disputed between the parties.
52 A photo of the pleaded Dolphin Treasure EGM is shown below. The photo shows three sections of the machine which are relevant to this proceeding: the top of the machine displays the pay table, which I explain further below, the middle of the machine shows the video screen, and below the video screen are the buttons that a gambler presses to use the machine or to access information about the EGM.
53 When a gambler is about to commence play on the Dolphin Treasure EGM, prior to having pressed any button, the following screenshot shows what is visible on the video screen. It displays a matrix of symbols and a 15 symbol grid, three symbols high and five wide. Harking back to the origins of these machines, each of these five vertical columns is described as a “reel”. It can be seen that each “reel” appears visually to be separated from its neighbouring reel (looking left to right) by a gap or line (in this screen shot, in blue), which contributes to the visual impression that the vertical column is an old fashioned mechanical reel, although it is not. It is agreed between the parties that it is apparent to a gambler that each of these reels is a computer graphic, not a physical or mechanical reel, as used to be the case. I will continue to use the term reel, without quotation marks, although that is, as I have found, no more than a description of the visual appearance rather than the function of the EGM. Each Dolphin Treasure EGM has 13 symbols, some of which are visible in the below screenshot. The 13 symbols are: the number nine, the number 10, pictures of the playing card symbols “jack” (represented by “J”), “queen” (represented by “Q”), “king” (represented by “K”) and “ace” (represented by “A”), and pictorial representations of a turtle, seahorse, starfish, octopus, “fish school”, treasure chest and a sunrise. The numbers 9 and 10, and the playing card symbols, are referred to as “royals”, while the remainder are referred to as “picture symbols”. The retention of some playing card symbols again harks back to the origin of “poker” machines, as I described above. This screenshot is taken from a video of the Dolphin Treasure EGM being played at Aristocrat’s offices, which was annexed to Ms Bryant’s affidavit.
54 The above screenshot is also the screen that the gambler will see during play. The gambler can select the number of credits to bet per line (represented by the numbers in red at the bottom of the screen), and whether to bet on one line or multiple lines (represented by the numbers in blue at the bottom of the screen). A gambler may bet one credit, two, three, five or 10 credits per line, with each credit being allocated a certain monetary amount. The gambler can also select how many “lines” to play across, being one, five, 10, 15 or 20 lines. In the screenshot above, only one line is being played, and only one credit bet for that line: that can be seen from the illumination of the number “1” in red and “1” in blue.
55 The top panel or “meter” shows the words “CREDIT”, “BET” and “WIN”. These indicate, respectively, the amount of remaining credit on the machine (that is, the total amount of money the gambler still has in the machine), the amount that is bet on each spin, and the amount that is won on a spin. The figures are expressed both in dollar amounts and in “credit” amounts. The amount of credit corresponding to an Australian dollar changes depending on the machine: for example, a machine may be a 1 cent credit machine, or a 10 cent credit machine. In each case, by selecting the red number “1” on the “bet per line”, the gambler will be betting respectively either 1 cent per line or 10 cents per line, for a spin.
56 The five animated reels appear to move vertically when the gambler starts to operate the machine, and a “spin” is initiated. The reels stop consecutively, from left to right, at regular intervals during play, with a “ticking” sound as each reel comes to a rest. It was accepted by Ms Bryant that sound is intended to sound like a mechanical reel coming to rest. For instance, the below screenshot, also taken from the video annexed to Ms Bryant’s affidavit, shows a spin having been initiated, and the reels coming to a stop from left to right. The screenshot shows that the first two reels have stopped, the third reel is about to come to a stop, and the fourth and fifth reels are still “spinning”. It can also be seen (by the illuminated blue number “1”) that only a one line play has been selected. I will continue to use the language of “spin” and “spinning” without continuing the quotation marks, even though, as I have noted, this is a visual illusion created by the software of the EGM.
57 When a reel comes to a stop, it “overshoots” a little before stopping. That is to say, the reel appears to “bounce” before coming to a rest. Although in cross-examination Ms Bryant expressed a different view, by final submissions it was not disputed by the respondents, as the screenshot of the fourth and fifth reel above shows, that it is not realistically possible for a gambler to count, recall or estimate the number and order of symbols in each column, or to compare the number and order of symbols between each column.
58 In order to win money from the machine, certain combinations of symbols matching the winning combinations, displayed on the pay table, must come to a stop on a particular win line, from left to right. The most straightforward win line is win line 1, which requires matching symbols across the middle row of the matrix. However, there are up to 20 win lines on the impugned Dolphin Treasure EGMs. A picture of the 20 win lines is shown below. This picture was taken during the view by the Court of two Dolphin Treasure EGMs at Crown Casino. A gambler may bet on one line in a given game, or she or he may bet on up to 20 lines, in what is referred to as multi-line betting. When playing multiple lines, the gambler will win a prize whenever a winning combination of symbols appear left to right on consecutive reels and positioned along any win line on which the gambler has placed a bet. To access this screen showing all the possible win lines, and therefore this information, the gambler must press a button on the machine, then select “View Game Rules” on the screen, and then scroll through the screens to reach the screen which displays the possible win lines. I infer that many gamblers with a high level of familiarity with the Dolphin Treasure EGM are likely to know most, if not all, of the possible available winning combinations. The only way that gamblers unfamiliar with this machine can access this information is through selecting the Game Rules screen, and scrolling through to this page.
59 The “pay table” information on a machine discloses how much a gambler will win for each of the 20 possible winning lines. It is physically displayed at the top of the machine at all times: see the top of the photo at [52]. This information may also be accessed via the “View Game Rules” option. A screenshot of this information on the playing screen is shown below. It shows that, for example, if a gambler gets four sunrises in a row, from left to right in the matrix on a particular win line, the gambler will win 2000 credits. In order to win any combination, the symbols must align consecutively, from left to right, on a win line that is being played. There cannot be a different symbol in the middle, unless that symbol is a sunrise, which is a “wildcard” symbol and can be substituted for any other symbol (other than a treasure chest) to form part of a winning combination. The more general exception to this rule is the “scatter” symbol, which on the Dolphin Treasure EGM is the treasure chest symbol. When two or more treasure chests appear anywhere on the matrix, the gambler will win a prize in accordance with the pay table shown below.
60 As can be seen in the pay table above, most symbols require a minimum of three matching, sequential symbols to result in a winning combination. The exceptions are nine, turtle, seahorse, sunrise and treasure chest, which require only two for a winning combination.
61 When a gambler wins on a particular win line, the screen shows the gambler which line has resulted in the win. For instance, the below screenshot, taken from the view recording, shows that the gambler has won on win line 10, because of the three jacks aligning on the win line. The “tic tacs” between the reels (in this screenshot, coloured blue) indicate the win line which produced the win. It can be seen this was a multi-line bet (indicated by the illuminated numbers on each side, and by the illuminated “10” in blue at the bottom of the screen), so the win does not have to occur across a single line of symbols. Although there is another jack appearing in the fourth reel, that jack is not part of the win, because the alignment of four jacks in that manner does not correspond with any of the win lines shown in the picture at [58] above.
62 This screenshot also shows what the applicant referred to as a “loss disguised as win” and what the respondents described as a “less than bet” win: that is, the amount of credits won in the example below (15) is less than the amount bet (30). Although the gambler has “won” on line 10 in this instance, because it was a 30 credit bet, the play has resulted in a net loss of 15 credits. I return to this concept later in these reasons.
63 All pay table wins, except treasure chest wins, will be multiplied by the amount bet per line for that spin to get the total win amount. Wins involving the treasure chest symbol will result in a prize that is multiplied by the total amount bet for that spin (across multiple lines, if that was the bet placed). In the above screenshot, the win amount is 15 credits because three jacks in a row on a win line gives a payout multiplier of five (see pay table at [59], and the amount bet on the line was three credits. Three multiplied by five is 15.
64 When a gambler wins any amount, the Dolphin Treasure EGM displays sounds and accompanying lights. The “WIN” meter also increments to record the amount won. The duration of the sound and light display coincides with the amount won, and is synchronised with the WIN meter incrementing – the higher the win, the longer the sound and light display. For instance, according to Ms Bryant’s evidence, the duration of a sound may vary from less than one second for a relatively small win, to approximately one minute for very large wins. It does not matter whether it is a “less than bet” win (to use the respondents’ terminology) resulting in a net loss, or if it is a net win; the sounds and lights are displayed whenever a win on any line is recorded.
65 The gambler can also pull up more information about the game. If the gambler presses the “information” button, the following screen is brought up.
66 When “View Game Information” is pressed on screen, the following screen is shown.
67 This screen, referred to as the “player information display” in this proceeding, contains the following information:
(1) it identifies whether the game is part of a “linked jackpot”;
(2) it shows the “Theoretical Return to Player” or “RTP” (being 87.97% on this machine); and
(3) it shows what is called “chances of winning” (based on “minimum bet selection” and excluding feature wins), by displaying the top five winning combinations, and the bottom five winning combinations, and the odds of winning these combinations. Thus, the information displays the five combinations which would give the greatest and smallest prizes respectively, and the odds of a gambler winning those prizes on this machine, but does not display the odds of bets in between these top and bottom five.
68 The text and information displayed on this screen forms a key part of the applicant’s pleading, and I return to these in more detail below.
69 The “View Tracking Information” option shows information about a gambler’s current playing session, and enables a gambler to keep track of when they start a game, and what their activity has been. It informs the gambler how much money has been inserted, how many credits have been played, how many credits have been won, overall session win or loss, the total time spent on the machine, the current time and credits available. A gambler can start or stop a tracking session as they wish. A screenshot of this is below.
70 The “View Game Rules” option relevantly shows information about how to play the game, and the win lines and pay tables I have described at [58]-[59] above.
The way the Dolphin Treasure functions: in general
71 I set out here a description of the programmed “features” of the Dolphin Treasure EGM, which are not visible to a gambler but upon which parts of the applicant’s claim rests. In relation to the use of the term “features”, the applicant describes certain programmed devices, such as the distribution of the symbols across the reels, or the sounds that the EGM emits when each of the reels stop, as “features”. These are programmed devices, designed and included by Aristocrat. Since the applicant uses the term “features” in her further amended statement of claim, I adopt this term in these reasons.
72 The symbols displayed on the video screen after the gambler initiates a spin and where those symbols stop on each reel are determined by a random number generator that forms part of the EGM software. On the pleaded Dolphin Treasure EGM, there are 30 (or approximately 30 across all of the impugned Dolphin Treasure EGMs) stopping positions for the symbols on each of the first four reels (numbered from left to right), and 44 stopping positions for the symbols on the fifth reel (or approximately 44 across all of the impugned Dolphin Treasure EGMs). Each stopping position thus corresponds with a symbol. The software determines the outcome of each spin by calling the random number generator to provide a random stopping position at which the reels will come to rest. Ms Bryant deposed that, broadly speaking, symbols involved in combinations which give higher prizes tend to appear less frequently. That is, those symbols are programmed to appear less frequently on each reel. Because of the random number generator, the outcome of any given spin is independent of any other spin, and EGMs will not become more or less likely to produce winning outcomes the longer they are played.
73 Once the random number generator determines the stopping position for each reel, the software is programmed so that the section of the reel that “spins” in view of the gambler is taken from that section of the reel containing that stopping position. It must be borne in mind that there is no “reel” actually spinning as on the old slot machines. Instead, a visual illusion is created by the software. Thus, while the gambler will see the symbols spinning past in the order in which they have been programmed to appear on an individual reel, she or he will not see the full reel containing 30 or 44 symbols spinning past on any given spin – she or he will only see a section of the reel. For instance, if the random number generator determines that the first reel will stop at stopping position 11 (of 30, or 44 as the case may be), the section of the reel that will spin is only the section that contains stopping position 11 (and a few symbols either side). However, the visual impression created is that the whole reel is spinning right around all the symbols present on that reel, as an old fashioned mechanical slot machine would have done. This mode of operation was confirmed by Ms Bryant in cross-examination.
74 The probability of a particular symbol coming to rest is therefore determined by two variables: the number of times that symbol appears on a reel, and the total number of stopping positions on that reel.
75 The RTP is also an important component of the Dolphin Treasure EGM, as it is with all EGMs. The RTP of each machine appears on the player information display, as shown in the screenshot in [66] above.
76 Although it is a key point of contention as to what an ordinary and reasonable gambler understands by the term “theoretical return to player”, the intended meaning of the term is not in dispute between the parties. By reference to the National Standard (a regulatory document which I explain at [106] below), Ms Bryant explains the RTP thus:
Theoretical RTP is the percentage of the total amount wagered that would be returned to players over the cycle of the game. Considering every possible outcome of the game over the cycle of the game, the theoretical RTP is the percentage of the total amount wagered that would be returned to players in winnings across all of those games.
Because each play of an EGM game is random and not causally related to any other play of that game, EGM games do not cycle through every possible outcome but instead produce random outcomes. Accordingly, RTP is a theoretical measure based on the calculation of the probability of each possible outcome occurring and the amount that those outcomes will pay in proportion to the total amount wagered to achieve them. Generally, the theoretical RTP percentage for a particular prize outcome is the probability of that prize outcome occurring (ie the number of outcomes in the entire game cycle that would pay that prize outcome divided by the total number of outcomes) multiplied by the prize amount that would be paid for that prize outcome in proportion to the game cost. The sum of the RTP percentages for every prize outcome in the game provides the total theoretical RTP for the game.
Over time, an EGM would be statistically expected to approach its theoretical RTP – in other words, the actual amount of money returned to players as a percentage of the total amount bet on a game will get closer to the theoretical RTP as more games are played.
(Emphasis added.)
77 Ms Bryant deposed (by reference again to the National Standard) that a game “cycle” is the “total number of possible outcomes of a game”. For one of the Dolphin Treasure EGM configurations, where there are four reels containing 30 stopping positions and a fifth reel containing 44 stopping positions, the “cycle” is 35,640,000. That is, there are over 35.6 million possible outcomes for each spin of the Dolphin Treasure. As confirmed by Ms Bryant in her affidavit, this is determined by the mathematical equation . Thus, when Ms Bryant stated that “[o]ver time, an EGM would be statistically expected to approach its theoretical RTP”, it can be seen that the time over which this would occur, given there are 35.6 million possible outcomes for each spin, would be a very long time indeed. The length of time was not quantified in the evidence, although see [442] below in relation to the Victorian regulatory requirement. See also [405] below for a pictorial representation of the convergence towards theoretical RTP over time.
78 There are regulations, differing across jurisdictions, as to the minimum required RTP on each machine. The Dolphin Treasure EGMs have, as a minimum, an RTP figure of 87%, however as I set out below, the precise figure varies between machines. Although the RTP is visible to a gambler through the player information display, the manner in which the RTP is worked out for a particular machine is not visible to the gambler. As Ms Bryant deposed, the RTP is determined by a mathematical calculation that depends on the length of the game’s reel strips (which determines the possible number of outcomes or “cycles”), the sequence of symbols that appear, and the pay table of the game. The RTP is also affected by whether the particular machine has a linked jackpot, or a standalone jackpot.
79 Another relevant programmed feature of the Dolphin Treasure EGM is its “volatility”. Ms Bryant describes the meaning of this term in her affidavit:
In relation to EGM games, volatility is used to describe the standard deviation of the outcomes of a game. Standard deviation is the measure of the spread or dispersion of numbers from their mean. Put simply, for a given theoretical RTP, a “high” volatility / high standard deviation game will have larger wins which occur less often, while a “low” volatility / low standard deviation game will have smaller wins which occur more often.
80 The volatility of a game is a product of the size of the different potential winning outcomes (that is, large wins or small wins), and the relative probability of achieving those winning outcomes. Section 3.9.17 of the National Standard, to which I return below, caps the “nominal standard deviation” of a game at 15. This ensures that an EGM does not have extremely high volatility, which would have the effect of too large a proportion of the RTP being returned via a small number of extremely unlikely but high paying outcomes. The evidence regarding the precise level of volatility of the Dolphin Treasure EGM was given by Ms Bryant during a portion of her evidence which was closed to the public, on the basis of a joint proposal from the parties and my satisfaction about the commercially sensitive nature of this evidence. However suffice to say that it is a function of the Dolphin Treasure EGM, and other EGMs, to have a pre-set volatility rate, not visible to gamblers, and which affects the relative size and frequency of winning outcomes.
81 Different models of Dolphin Treasure EGMs may also function differently, in the sense of having different symbol configurations. These variations for example, mean that different models may have different reel lengths, different distribution of symbols and different order of symbols on a particular reel. While the rules and pay table are consistent between different models of Dolphin Treasure EGMs, the RTP may vary within the regulatory constraints. The fact that different models have different reel configurations is not visible to the gambler. However, this variation led the applicant in her pleadings to allege the existence of a number of configurations of the Dolphin Treasure machine. As the case developed, and by the time of final submissions, it was apparent that although this level of detail (and the multitude of configurations set out in the pleadings) might have been necessary for accuracy, it was not necessary to descend into that level of detail for the applicant’s claims to be understood, nor indeed for those claims to succeed. Whatever the precise configuration of each Dolphin Treasure EGM on the floor of Crown Casino (in terms of the number of stopping points and the number of symbols in each programmed visual representation on each machine), the same arguments apply in the same way to each machine.
82 As with all other EGMs, Dolphin Treasure EGMs also have a pre-set “spin rate”. The spin rate is defined in the Gambling Regulations 2003 (Vic) to mean the “interval between spins on the gaming machine”. As Senior Counsel for Aristocrat put it, it is the time it takes for each reel to spin. The spin rate is regulated by s 62AC of the Casino Control Act, requiring the spin rate to be at least 2.14 seconds. That prevents each reel from spinning too slowly, or at least slower than 2.14 seconds for each reel. I return to this later in considering regulation of poker machines, but the point here is that this is again, a programmed feature of the Dolphin Treasure EGM which may not be obvious to an ordinary and reasonable gambler. Evidence subject to interim orders pursuant to s 37AI of the Federal Court of Australia Act 1976 (Cth) was adduced as to the range of spin rates of the Dolphin Treasure EGMs.
83 There are two other features of the Dolphin Treasure EGM which are key aspects of the applicant’s case: the “size” of the reel and the distribution of symbols among the reels. As these are key aspects, I discuss them in more detail.
The way the Dolphin Treasure functions: variation in the number of symbols on each reel
84 In the applicant’s claims, as I set them out below, this is described as the “Oversized Reel Feature”, but since that is a description coined by the applicant as part of the framing of her case, at this point I shall attempt to describe that feature in more neutral terms.
85 Indeed, using the word “size” in this context is somewhat confusing. The word “size” might lead one to think the debate was about the dimensions of the reel, but it is not. It is about the number of “stops” which are programmed into each reel. As I have noted, each “stop” corresponds with a symbol. The “size” in this context is therefore referring to the number of symbols on each reel. The more symbols on a particular vertical column or reel, the greater the reel “size”, in the context of the applicant’s case. Given the Dolphin Treasure EGM reels are computer graphics and not physical reels, it is confusing to refer to the reel “size” in this sense, but one can picture an old mechanical reel where the physical dimensions of a reel may well have correlated with the number of symbols on the reel.
86 The variation operates as follows. As pleaded, each of the first four reels of the Dolphin Treasure EGM contains approximately 30 symbols. The fifth reel (that is, the vertical column to the right if one is looking at the screen shot in [53] above), however, contains approximately 44 symbols. This exact number of symbols per reel varies depending on the particular configuration in a given model. For instance, the variation in what has been identified by the applicant for the purposes of her pleading as “configuration 4” models is that reels 1 and 4 have 30 symbols, reel 2 has 32 symbols, reel 3 has 31 symbols and reel 5 has 44 symbols. The variation in configuration 9 models is that reels 1 and 4 have 30 symbols, reels 2 and 3 have 32 symbols and reel 5 has 45 symbols.
87 The following table is the actual reel “map” configuration for configuration 1 of the Dolphin Treasure EGM, and is taken from an Aristocrat document entitled “Combination Sheet Approval”. Counsel for Aristocrat waived any confidentiality pertaining to this particular table during trial. It shows the number of stopping positions on each of the five reels on the left hand column, and the corresponding symbol for each position on each reel. It can be seen from this map that the first four reels have 30 stopping positions aligning with 30 symbols, while the fifth reel has 44 stopping positions aligning with 44 symbols. This is what the applicant describes as the “Oversized Reel Feature”.
The way the Dolphin Treasure functions: variation in the frequency of symbols
88 In the applicant’s claims, as I set them out below, the variation in frequency of symbols on a given reel is described as the “Starved Reel Feature”. Since it is the applicant’s phrase, it is also appropriate to describe that feature of the reel in more neutral terms.
89 This feature concerns how often a particular symbol appears on each reel. The total number of a particular symbol is not distributed evenly, nor as evenly as possible, between each reel. For example, the symbol 10 on a given configuration may appear more frequently on one reel of an EGM game than another. In the reel “map” at [87] above, it can be seen that the symbol 10 appears twice on reel 1, once on reel 2, six times on reel 3, twice on reel 4, and four times on reel 5. The symbol 10 appears, in total, 15 times across all five reels. If the symbol was evenly distributed across all reels, it would appear three times on each reel. This is not the case, and the fact that it is not evenly distributed across all reels is not visible to a gambler on the Dolphin Treasure EGM. Indeed, the distribution and frequency of each symbol on each reel is invisible to a gambler on the Dolphin Treasure. Nor is any information about this feature provided to the gambler. In this sense, it is a wholly internal feature.
90 This uneven distribution of symbols is not the case for all symbols. The treasure chest and sunrise symbols – both very “valuable” symbols capable of leading to large wins – each appear only once on each reel. The ace symbol similarly has a more even distribution, at least in configuration 1. It appears twice on reels 1 to 3, three times on reel 4 and four times on reel 5.
91 The table below shows how each of the symbols are distributed across the five reels in configuration 1. This table is taken from reel maps provided by Aristocrat pursuant to the Court’s order on 21 November 2016.
92 The reel table shows that for many symbols, there is one reel where the symbol appears only once, and is otherwise unevenly distributed across the reels. The number and distribution of symbols affects the probabilities of symbols appearing in lines, after being subject to the random number generator.
The evidence about which witnesses have played the Dolphin Treasure
93 Some lay witnesses gave some evidence about their playing of the Dolphin Treasure. Likewise some lay witnesses gave some evidence about playing poker machines at Crown Casino, without specifying the Dolphin Treasure EGM. In this section I summarise that evidence.
94 Although the applicant contends, and the respondents broadly accept (subject to their submissions about the effect on the applicant’s persuasive burden, to which I return later in these reasons) that this kind of evidence was not necessary at least for the s 18 claim, this evidence was capable of making a material contribution to the proof of the applicant’s case.
95 The following table summarises which lay witnesses played the Dolphin Treasure EGM, where they played it, and the frequency they played.
|
Witness |
Played Dolphin Treasure? |
Venue where Dolphin Treasure played |
Frequency of play of Dolphin Treasure |
|
Shonica Guy |
Yes |
Flagstaff Hotel; New York Bar and Grill |
Frequently |
|
Anna Helena Bardsley |
Yes |
Likely Crown Casino, but uncertain. |
Frequently |
|
Catherine Anne Sommerville |
Yes, one of her favourites |
Royal Oak Hotel in Richmond |
Frequently* |
|
Cornelia (Conny) McLaughlin |
No |
N/A |
N/A |
|
Libby Mitchell |
Yes, her favourite EGM |
Numerous venues, including Tanti Hotel in Mornington, the Tower Hotel, the Palace, the Royal Oak in Richmond, Crown Casino. |
Frequently |
|
Robert John Ingmire |
Yes |
Cannot recall venue |
Infrequently |
*I infer Ms Sommerville played the Dolphin Treasure frequently because she played poker machines regularly, and Dolphin Treasure was among her favourite EGMs. She did not depose to her frequency of play.
96 Before turning to a description of the applicant’s claims, it is appropriate to set out the applicable legislative provisions.
Relevant legislative provisions
The relevant ACL contravention provisions
97 The applicant alleges contraventions of ss 18, 20 and 21 of the ACL. Section 18 prohibits misleading or deceptive conduct:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1).
Note: For rules relating to representations as to the country of origin of goods, see Part 5‑3.
98 Section 20 prohibits unconscionable conduct “within the meaning of the unwritten law”:
20 Unconscionable conduct within the meaning of the unwritten law
(1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(2) This section does not apply to conduct that is prohibited by section 21.
99 Section 21 also prohibits unconscionable conduct, as defined by its own terms:
21 Unconscionable conduct in connection with goods or services
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of goods or services to a person (other than a listed public company); or
(b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.
(2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct:
(a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or
(b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.
(3) For the purpose of determining whether a person has contravened subsection (1):
(a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and
(b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.
(4) It is the intention of the Parliament that:
(a) this section is not limited by the unwritten law relating to unconscionable conduct; and
(b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and
(c) in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:
(i) the terms of the contract; and
(ii) the manner in which and the extent to which the contract is carried out;
and is not limited to consideration of the circumstances relating to formation of the contract.
100 Section 22(1) provides a non-exhaustive list of matters the Court may consider in determining whether s 21 has been contravened in the context of a customer-supplier relationship:
22 Matters the court may have regard to for the purposes of section 21
(1) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:
(a) the relative strengths of the bargaining positions of the supplier and the customer; and
(b) whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and
(c) whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and
(e) the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and
(f) the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and
(g) the requirements of any applicable industry code; and
(h) the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and
(i) the extent to which the supplier unreasonably failed to disclose to the customer:
(i) any intended conduct of the supplier that might affect the interests of the customer; and
(ii) any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and
(j) if there is a contract between the supplier and the customer for the supply of the goods or services:
(i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and
(ii) the terms and conditions of the contract; and
(iii) the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and
(iv) any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and
(k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and
(l) the extent to which the supplier and the customer acted in good faith.
101 The applicant seeks declaratory relief under s 21 of the Federal Court of Australia Act (Cth), which provides:
21 Declarations of right
(1) The Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
(2) A suit is not open to objection on the ground that a declaratory order only is sought.
102 She also seeks injunctive relief under s 232 of the ACL, which provides:
232 Injunctions
(1) A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:
(a) a contravention of a provision of Chapter 2, 3 or 4; or
(b) attempting to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) conspiring with others to contravene such a provision.
(2) The court may grant the injunction on application by the regulator or any other person.
(3) Subsection (1) applies in relation to conduct constituted by applying or relying on, or purporting to apply or rely on, a term of a contract that has been declared under section 250 to be an unfair term as if the conduct were a contravention of a provision of Chapter 2.
(4) The power of the court to grant an injunction under subsection (1) restraining a person from engaging in conduct may be exercised:
(a) whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of a kind referred to in that subsection; and
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any other person if the person engages in conduct of that kind.
(5) Without limiting subsection (1), the court may grant an injunction under that subsection restraining a person from carrying on a business or supplying goods or services (whether or not as part of, or incidental to, the carrying on of another business):
(a) for a specified period; or
(b) except on specified terms and conditions.
(6) Without limiting subsection (1), the court may grant an injunction under that subsection requiring a person to do any of the following:
(a) refund money;
(b) transfer property;
(c) honour a promise;
(d) destroy or dispose of goods.
(7) The power of the court to grant an injunction under subsection (1) requiring a person to do an act or thing may be exercised:
(a) whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to any other person if the person refuses or fails to do that act or thing.
103 In the alternative, the applicant also makes claims under s 52 of the Trade Practices Act 1974 (Cth), in relation to the historic conduct of the respondents. Given my conclusions, it is not necessary to set out the Trade Practices Act provision here.
The regulation of gambling in Victoria
104 As I noted at [15] above, poker machines were legalised in Victoria in 1991. Since then, there have been a number of legislative changes and reforms, and reviews have been conducted into the regulation of poker machines. It is not necessary to set out the history of these reforms. I set out in this section only those parts of the regulatory framework that are relevant to the present circumstances, in respect of which declaratory and injunctive relief is sought.
105 The primary legislative schemes relevant to EGMs in Victoria are the Casino Control Act, the Gambling Regulation Act 2003 (Vic), and the Gambling Regulation Regulations 2005 (Vic) and Gambling Regulations 2015 (Vic). Both the 2005 and 2015 Regulations are relevant because most (36 out of 38) of the Dolphin Treasure EGMs on the Crown Casino floor were approved under the 2005 Regulations, while the 2015 Regulations regulate the brochures which are made available on the Casino floor. Crown submits there is only one machine approved under the 2015 Regulations, but in my opinion the evidence discloses (annexure AS-2 to the affidavit of Mr Seci) there are two machines approved under the 2015 Regulations. In any event, it is clear both sets of regulations are relevant.
106 There are also the Standards made by the Victorian Commission for Gambling and Liquor Regulation (I refer to this Commission and its predecessor, the Victorian Commission for Gambling Regulation, as “the Commission”) under the Gambling Regulation Act which regulate the design of EGMs. The Australian/NZ Gaming Machine National Standard (the National Standard) is jointly developed by gaming regulators across the Australian and New Zealand jurisdictions. There is also a Victorian Appendix to the National Standard. Where there is a conflict between the two, the Victorian Appendix applies: V1.1 of the Victorian Appendix.
107 First, the Casino Control Act. The purpose of the Casino Act is set out in s 1(a), being to establish a system for the licensing, supervision and control of casinos with the aims of:
(i) ensuring that the management and operation of casinos remains free from criminal influence or exploitation; and
(ii) ensuring that gaming in casinos is conducted honestly; and
(iii) promoting tourism, employment, and economic development generally in the State;
108 Section 6 of the Casino Act renders gambling in casinos a lawful activity, in accordance with the Act and the Gambling Regulation Act:
6 Licensed casinos declared lawful
(1) Subject to this Act and the Gambling Regulation Act 2003, the conduct and playing of a game and the use of gaming equipment is lawful when the game is conducted, and the gaming equipment is provided, in a casino by or on behalf of the casino operator.
(1A) Despite the provisions of any other Act or law, a bet made in an approved betting competition and the use of a totalisator in such a competition are lawful when the competition is conducted in accordance with this Act.
(2) Except to the extent (if any) that the regulations otherwise provide, and except to the extent that Chapter 3 of the Gambling Regulation Act 2003 otherwise provides, that Act does not apply to the conduct and playing of a game or approved betting competition and the use of gaming equipment when the game or approved betting competition is conducted and the gaming equipment is provided in a casino by or on behalf of the casino operator.
(3) This section does not operate to enable a proceeding to be brought to recover—
(a) money won in the course of gaming or betting in a casino; or
(b) money or a cheque or other instrument given in payment of money so won; or
(c) a loan of money to be wagered in the course of gaming or betting in a casino—
unless the money was won from or wagered with a casino operator.
(4) The conduct of operations in a casino in accordance with this Act and the conditions of the relevant casino licence is not a public or private nuisance.
109 Section 8 of the Casino Act allows for applications to be made for casino licences after 1 December 1992. Crown was granted such a licence on 19 November 1993. That licence was amended a number of times, with the effect that it now ceases to have effect on 18 November 2050 unless cancelled or surrendered earlier. The amended licence stipulates, among other things, that Crown must not operate more than 2,628 gaming machines while the Casino is open for business. This maximum of 2,628 gaming machines is also stipulated in the Casino Act at s 62A(2). Gaming machine is defined in the Casino Act by reference to the Gambling Regulation Act to mean:
gaming machine means any device, whether wholly or partly mechanically or electronically operated, that is so designed that—
(a) it may be used for the purpose of playing a game of chance or a game of mixed chance and skill; and
(b) as a result of making a bet on the device, winnings may become payable—
and includes any machine declared to be a gaming machine under section 3.1.3 but does not include—
(c) a lucky envelope vending machine within the meaning of Chapter 8; or
(d) interactive gaming equipment that is used or intended to be used for the purposes of interactive games and not for gaming of any other kind;
110 This definition includes EGMs, and in particular, the Dolphin Treasure EGM. There is no debate that poker machines are games of chance, and are not games of “mixed chance and skill”.
111 It is a condition of Crown’s licence that it implements a Responsible Gambling Code of Conduct that has been approved by the Commission: s 69. “Responsible Gambling Code of Conduct” is a term defined by reference to the Gambling Regulation Act to mean “a Code of Conduct to foster responsible gambling”.
112 “Responsible gambling” is not a defined term, however it was a term used frequently during trial, and a term to which I return in these reasons.
113 Part 5 of the Casino Act contains detailed provisions as to the regulation of casino operations. Section 59 provides that casino layouts must be approved by the Commission, including the location of gaming machines. Gaming machines must be located wholly indoors: s 62AA. They must only be obtained from manufacturers and suppliers listed on the Roll of Manufacturers, Suppliers and Testers under the Gambling Regulation Act: s 62A(1). Aristocrat is such a manufacturer and supplier. The Minister may give directions to casino operators as to bet limits applying to gaming machines: s 62A(4). Bank notes with a denomination larger than $50 must not be accepted on gaming machines: s 62AB(1). Automatic playing of gaming machines is also prohibited: s 62AB(2) (however neither s 62AB(1) or (2) apply to gaming machines approved before January 2003 until January 2008: s 62AB(3)). Spin rates of games must not be less than 2.14 seconds: s 62AC(1), and see [82] above. Linked jackpots must be approved by the Commission: s 62B. Perhaps most importantly, gaming machines must not be used for gaming in a casino unless the Commission has approved that machine, with or without conditions which must be followed: s 64(1)(a).
114 It is clear that many of these restrictions are designed to address some of the circumstances which can lead members of the public to gamble excessively, or in ways which may cause them to gamble large sums of money in a short period of time.
115 Section 72(2A) allows a person voluntarily to apply to be excluded from entering or remaining in a casino. If a person is subject to such an exclusion order, s 77 provides, somewhat curiously, that penalties may apply to that person if she or he enters the casino. Section 78 requires casino employees or agents notify an inspector (appointed under the Victorian Commission for Gambling and Liquor Regulation Act 2011 (Vic)) as soon as possible if they believe that a person subject to an exclusion order is in the casino. The inspector must then remove that person. Penalties may apply if an inspector is not notified as soon as possible. Casino employees and agents may also lawfully prevent or remove persons subject to an exclusion order from the casino themselves: s 78(4). There are further provisions which prohibit the advertising of the casino to excluded persons (s 78A(1)) and the forfeiture of winnings of excluded persons (s 78B).
116 Finally, the Commission is given certain powers and functions under the Casino Act. Section 141 provides that the Commission’s functions include overseeing the operation and regulation of casinos, supervising directly the operation of casinos and the conduct of gaming and betting within them and inspecting, testing and approving gaming machines.
117 Second, the Gambling Regulation Act. The Gambling Regulation Act is a large and detailed Act, at over 1,200 pages, regulating authorised gambling and prohibiting unauthorised gambling across the industry. EGMs are regulated under Chapter 3 of that Act. The purpose of Chapter 3 is set out in s 3.1.1, which provides that the Gambling Regulation Act establishes a system for the regulation, supervision and control of gaming equipment and monitoring equipment with the aims of:
(a) ensuring that gaming on gaming machines is conducted honestly; and
(b) ensuring that the management of gaming equipment and monitoring equipment is free from criminal influence or exploitation; and
(c) regulating the use of gaming machines in casinos and other approved venues where liquor is sold; and
(d) regulating the activities of persons in the gaming machine industry; and
(e) promoting tourism, employment and economic development generally in the
State; and
(f) fostering responsible gambling in order to—
(i) minimise harm caused by problem gambling; and
(ii) accommodate those who gamble without harming themselves or others
118 Similarly to the Casino Act and the absence of a definition of “responsible gambling”, the Gambling Regulation Act does not define “problem gambling”.
119 Chapter 3 applies to venue operators, which includes casino operators such as Crown: s 3.1.5. The conduct of gaming is lawful when conducted in an approved venue or casino in accordance with Chapter 3: s 3.2.1. Section 3.4.1B(3) provides that a venue operator must ensure that any gaming machine on which it conducts gaming complies with a standard made by the Commission under s 3.5.3, unless otherwise approved by the Commission. Under s 3.5.1, the manufacture, sale, supply, obtaining and possession of gaming machines is prohibited except in accordance with the Gambling Regulation Act. Section 3.5.3 provides that the Commission, with the Minister’s approval, may make and amend standards for gaming machine types and games.
120 Under s 3.5.4, the Commission may approve or refuse to approve a gaming machine type or a game, having regard to the following under subs (3):
(a) player return, game fairness and security and responsible gambling; and
(b) any standards in force under section 3.5.3; and
(c) the certificate of a person listed on the Roll, being a person referred to in section 3.4.61(1)(c).
121 If a gaming machine type or a game is varied, it is no longer approved under the Act, and the variation must be approved before the gaming machine type or game may be used: s 3.5.5. The Commission may withdraw its approval if it considers it “necessary or appropriate in the public interest or for the proper conduct of gaming”: s 3.5.6(1).
122 Sections 3.5.29 and 3.5.30 then essentially mirror ss 62AB and 62AC of the Casino Act in banning denominations larger than $50 from gaming machines, banning autoplay facilities and regulating the spin rate.
123 Third, the 2005 Regulations and 2015 Regulations. Under both versions of Regulations, gaming machines must be capable of generating and displaying, and at the instruction of a gambler must generate and display, “electronic game information”: reg 23 of the 2005 Regulations; reg 20(1) of the 2015 Regulations. The 2015 Regulations make it an offence for a casino operator to permit gaming on gaming machines if it knows or could reasonably be expected to know that a gaming machine is not able to display electronic gaming information: reg 20(1).
124 “Electronic game information” was defined in the 2005 Regulation in reg 22:
22. What is electronic game information?
Electronic game information is the following information generated by, and displayed on the screen of, a gaming machine for each game that may be played on that machine—
(a) the return to players of that game;
(b) the average number of individual games played per any win, based on one line being played per game;
(c) the chances or odds of achieving the top 5 and bottom 5 (in value) individual winning combinations;
(d) the maximum and minimum bet options available.
125 It was defined more expansively in the 2015 Regulation, under reg 5:
electronic game information means the following information in relation to a game that may be played on a gaming machine—
(a) the return to players of that game;
(b) the average number of individual games played for each win, based on one line being played per game, which may be described as “theoretical number of individual games played per win”;
(c) the odds of achieving the 5 most valuable individual winning combinations;
(d) the odds of achieving the 5 least valuable individual winning combinations;
(e) the maximum and minimum bet options available;
(f) if the gaming machine is part of a linked jackpot arrangement—
(i) a statement that the gaming machine is part of a linked jackpot arrangement; and
(ii) the sum of the return to players contributed by the game and the return to players contributed to the linked jackpot arrangement, which may be described as “total return”; and
(iii) the return to players of the game contributed by the linked jackpot arrangement;
126 Both versions of the Regulations also require “electronic player information” to be displayed: reg 25 of the 2005 Regulations; reg 20(2) of the 2015 Regulations. “Electronic player information” was defined in the 2005 Regulations in reg 24:
24. What is electronic player information?
Electronic player information is the following information generated by, and displayed on the screen of, a gaming machine—
(a) cash in, being the amount (expressed in dollars and cents) the player has put into the gaming machine during the session;
(b) credits played, being the amount (expressed in dollars and cents) wagered by the player on the gaming machine during the session;
(c) credits won, being the amount (expressed in dollars and cents) won by the player on the gaming machine during the session;
(d) the session win or loss, being the difference (expressed in dollars and cents) between credits won and credits played;
(e) cash out, being the amount (expressed in dollars and cents) collected from the gaming machine by the player during the session;
(f) credits available, being the amount (expressed in dollars and cents) that is currently available for the player to wager on the gaming machine;
(g) the time the player began the session;
(h) the current time of day;
(i) the length of the session;
(j) if jackpot win amounts are not included on the credit meter of the gaming machine, a statement that the information displayed does not include amounts won from a jackpot during the session.
Examples
Example 1
The following is an example of electronic player information on a system where all jackpot win amounts are included on the credit meter:
|
Cash in |
$100.00 |
|
Credits played |
$245.50 |
|
Credits won |
$239.70 |
|
Session Win or (Loss) |
($5.80) |
|
Cash out |
$0.00 |
|
Credits available |
$94.20 |
|
Time commenced |
8:48 p.m. |
|
Current time |
10.52 p.m. |
|
Total time played |
2 hours 4 minutes. |
Example 2
The following is an example of electronic player information on a system where not all jackpot win amounts in the session are included on the credit meter:
|
Cash in |
$100.00 |
|
Credits played |
$245.50 |
|
Credits won |
$239.70* |
|
Session Win or (Loss) |
($5.80)* |
|
Cash out |
$0.00 |
|
Credits available |
$94.20* |
|
Time commenced |
8:48 p.m. |
|
Current time |
10.52 p.m. |
|
Total time played |
2 hours 4 minutes. |
* These totals do not include amounts won from a jackpot during the session.
127 The definition was amended in the 2015 Regulations. Reg 5 provides:
electronic player information means the following information in relation to a continuous period of gaming on a gaming machine by an individual player—
(a) the amount of money the player has put into the gaming machine during the period, which may be described as “cash in”;
(b) the amount of money wagered by the player on the gaming machine during the period, which may be described as “credits played”;
(c) the amount of money won by the player on the gaming machine during the period, which may be described as “credits won”;
(d) the difference between the credits won and the credits played during the period, which may be described as “session win or loss”;
(e) the amount of money paid out by the machine during the period which may be described as “cash out”;
(f) the amount of money that is currently available for the player to wager on the machine, which may be described as “credits available”;
(g) the time at which the period started;
(h) the current time of day;
(i) the length of the period;
(j) if amounts won in a jackpot are not included on the credit meter of the gaming machine, a statement that the information displayed does not include amounts won in a jackpot during the period;
128 In relation to brochures, the 2015 Regulations set out that the Minister may make player information standards setting out the information that must be contained in posters, “talkers” and brochures: reg 11(1). Crown must take “all reasonable steps” to ensure these posters, talkers and brochures setting out the information standards are displayed in particular areas of the casino: regs 12(3), 13(3), 14(3). The 2015 Regulations specify exactly where each of these items must be displayed – talkers, for example, must be displayed on the gaming machine itself, so that it is clearly visible from the front of the machine: reg 13(3). It is an offence to alter the information set out in the information standards unless the alteration is made to comply with an amendment to the standards: reg 17. On request by Crown, the Commission must provide the posters, talkers and brochures in a form allowing them to be copied: reg 15.
129 Fourth, the Standard, comprising the National Standard and the Victorian Appendix to that Standard. Each of the impugned Dolphin Treasure EGMs was approved under revision 10 of the National Standard, dated 24 December 2008, and the Victorian Appendix. Since 23 September 2017, an amended National Standard 2016 and Victorian Appendix 2017 have come into effect, however for the purposes of this proceeding, only the 2008 version is relevant.
130 The Standard set out in detail the technical specifications of EGMs which must be met before an EGM is approved. The intent of the Standard, as set out in para 1.3.1 of the National Standard is to ensure gaming on gaming machines occurs in a manner that is “fair”, “secure” and “auditable”, and that gaming machines are reliable in these respects. However, para 1.3.2 provided that it was not the intention of the Standard to “unreasonably”:
a) mandate a single solution or method of realising an objective;
b) limit technology application to gaming equipment;
c) limit creativity and variety of choice;
d) limit marketability;
e) advantage any supplier or manufacturer of equipment; or
f) preclude research and development into new technology, equipment or innovative solutions.
131 Section 2 of the National Standard specified detailed requirements for the hardware of each EGM, including construction of the cabinet housing the EGM (section 2.3) and cash input systems (section 2.5).
132 Section 3 of the National Standard specified the requirements for the software of each EGM. Relevantly, para 3.8.2a requires that “Credit”, “Bet” and “Win” meters must be displayed on the game screen in a format which is “clearly visible to the player and easily distinguishable”. The values that are displayed to the gambler, such as the wins and credit “may be incremented or decremented to the value of the actual meter for visual effect”: para 3.8.4. The outcome of each game element must be displayed for a reasonable length of time: para 3.8.4a.
133 Paragraphs 3.8.5 and 3.8.6 then specified the requirements for multi-line games. EGMs must clearly indicate each individual line that is activated, so that a gambler is in no doubt as to which lines are being bet on: para 3.8.5. The pay line or pay lines won must be clearly highlighted to the gambler, which may be done by drawing a line over the symbols on the winning line: para 3.8.6.
134 Section 3.9 provided standards in relation to the game play. Paragraph 3.9.2 provided that, unless otherwise provided in the rules of the game, events of chance within the games must be independent of any other events within the play or any other events within previous plays. That is, as Crown phrased it in its closing submissions, “[e]ach spin must be independent”. Paragraph 3.9.9 set out the information which an EGM must display to the gambler:
3.9.9 A gaming machine must display the following information to the player:
a) the player’s current credit balance;
b) the current bet amount;
c) all possible winning outcomes, or be available as a menu item or help menu;
d) win amounts for each possible winning outcome or be available as a menu or help screen item;
e) the amount won for the last completed play (until the next play starts, or following player input related directly to the next play); and
f) the player options selected (e.g. bet amount, lines played) for the last completed play (until the next play starts, or following player input related directly to the next play).
135 Paragraph 3.9.14 set out, among other things, that the prize determination “shall be exclusively a consequence of the outcome of a computer based [random number generator] in conjunction with the prevailing payout table and rules of the game.”
136 Under para 3.9.15, games must have a “theoretical/estimated statistical expectation that the minimum player return (RTP) of the game will be greater than or equal to” a number specified. Paragraph 3.9.16 similarly provided for a “maximum” player return. It should be noted that in the National Standard, “RTP” is defined to be the “theoretical/estimated statistical expectation” of player return. Paragraph 3.9.17 caps the nominal standard deviation of a game at 15. As I have noted above, this has an effect on the RTP.
137 Importantly, the paragraphs under the heading “Game Fairness Objectives” set out what is meant by “fairness” in the Standard. Relevantly, these paragraphs provide:
3.9.57 All games are to be fair to players in that the game must not be designed to give the player a false expectation of better odds by falsely representing any occurrence or event. For example, games (and features within games) that incorporate an illusion of control in that players are offered an option which appears to provide an opportunity to influence the outcome of a game using skill, when in fact the outcome cannot be influenced by the use of skill and/or the outcome has already been determined, are not acceptable.
3.9.57a The display of the result of a game outcome must not be misleading or deceptive to the player (e.g. must not improperly indicate a near-miss).
3.9.58 The mapping of numbers directly from the RNG output or through a scaling algorithm shall not influence a symbol to occur with a probability not equal to its statistical expectation.
3.9.59 Symbols of virtual reel games (video) must be displayed in the same arrangement as per the reel strips. No manipulation and rearrangement of the reel’s symbols when displayed to the player is permitted.
138 Section 4 set out the standards applicable to the artwork on EGMs. Section 4.3 provided detailed requirements as to how symbols are to be set out and the relationship between symbols and prizes.
139 As noted above, the Victorian Appendix to the National Standard applied to the extent that there was any inconsistency between the instruments: V1.1 of the Victorian Appendix.
140 Of most relevance is the additional section V9 of the Victorian Appendix, entitled “Responsible Gambling”. This was not a section contained in the National Standard. In this section, para V9.1.1 provided that artwork on an EGM must not:
a). be factually incorrect
b). be misleading or deceptive
c). suggest that playing a gaming machine is likely to improve a person’s social status
d). suggest that playing a gaming machine is likely to make a person more attractive to others
e). suggest that playing a gaming machine is likely to result in a person’s financial betterment
f). describe money spent in playing a gaming machine as an investment
g). suggest that a player’s skill can influence the outcome of a game that is purely a game of chance; or
h). suggest that a person’s chances of winning a prize are influenced by the length of time for which a person plays a game.
141 At para V9.8.4, the Victorian Appendix set out the required minimum RTP applicable in Victoria:
Game Minimum RTP (see also National Standard 3.9.15)
V9.8.4. A game, including jackpot and any other prizes that are configured as part of the game, cannot be made available for play unless the theoretical/estimated statistical expectation of the minimum player return (RTP) on that game will be greater than or equal to 87%.
142 Paragraph V9.15.1 set out the requirements for “electronic game information” to be displayed to players. It replicates the requirements in regs 22 and 23 of the 2005 Regulations, referred to above.
143 Paragraph V9.15.2 then set out specific requirements for the information that must be displayed:
(a) if a game operates with more than one Return to Player or with a range of RTP, the range of RTP’s must be displayed. If the game is part of a linked jackpot arrangement, the total theoretical RTP of this game and the jackpot contribution rate must be displayed (see V9.17).
(b) where the average number of individual games played per any win, based on one line being played per game, is not possible, the average number of individual games played per any win, can be based on the minimum bet per game play.
(c) In relation to the chances or odds of achieving the top 5 and bottom 5 winning combinations, where more than one symbol pays the same amount, either the order by chance, hierarchy or alphabetical value can be used for display. For example, if five “Tens” and five “Queens” pay the same amount the “Queens” combination may be displayed first. Similarly if five “Apples” and five “Oranges” pay the same amount the “Apples” may be displayed first.
(d) If an automatic timeout period is implemented for displaying the electronic game information, the timeout period must not be less than 30 seconds. For example the content and format of the EGI, see screen below (screen 9.15).
144 That paragraph of the Standard also included a screenshot of how this information may be displayed, reproduced below. It should be emphasised that the Standard did not (and does not) mandate the adoption of this form and content, but rather gives it as an example of compliant information. Nevertheless, it is clear that the wording of the information displayed on the Dolphin Treasure EGM is very similar to the wording in this screenshot, and it is also clear that the adoption of the form and content of the example given in the Standard is seen as a reliable way to ensure compliance:
145 Paragraph V9.16.1 then set out the requirements for the electronic player information display, replicating the requirements under regs 24 and 25 of the 2005 Regulations.
The applicant’s allegations
146 Although emerging from a mostly common substratum of facts, the applicant’s allegations under s 18, and under ss 20 and 21, are quite separate.
The s 18 claim
147 The applicant’s s 18 case is built around three alleged representations. Two of the three representations (the Equal Reel Size representation and the Equal Symbol Distribution representation) are alleged to arise from features of the games played on Dolphin Treasure EGMs, as seen and experienced by a person who plays the machine. The applicant describes these two representations as “impressionistic” representations, arising from the machine’s features, not being direct verbal or written representations. Crown describes these two representations as the “first limb” of the s 18 case.
148 The applicant contends there are three such features which form the basis for these two representations. I described these features more generally above, however I set out here how the applicant uses those features in her case. First, she says that during play, the video screen of the Dolphin Treasure EGM displays an image of five animated reels, each reel comprising symbols, with each symbol being about equal size, spinning at even pace, and coming to rest consecutively, from left to right of the screen and at approximately even intervals. The applicant refers to this as the “Even Reel Image”.
149 The second feature is the “ticking” sound emitted by the Dolphin Treasure EGM as each of the five reels comes to a rest. The applicant alleges that this sound resembles the sound made by the spinning reels of an old-fashioned slot machine, and is played for approximately the same amount of time before each of the five reels comes to rest. The applicant refers to this as the “Spinning Reel Sound”.
150 The third feature is what the applicant calls the “Dispersed Symbols Image”. This feature is that once each of the five reels comes to rest, a matrix of symbols five reels wide by three symbols high is visible, and on any given reel the symbols are distributed so that no two symbols of the same kind appears on any given reel: that is, it will be recalled, looking at the reel as a vertical column. The applicant alleges that this contributes to an “impression of a dispersion and even distribution of the symbols on each reel”.
151 From these three features, the applicant alleges that two “impressionistic” representations arise: the “Equal Reel Size representation” and the “Equal Symbol Distribution representation”.
152 The third representation (the Risk representation) relates to the player information supplied by Crown on the machine, available when a player pushes an “information” button. Crown describes this representation as the “second limb” of the s 18 case (with the first two impressionistic representations being the first limb), and I accept that is a helpful way to approach the applicant’s contentions.
The Equal Reel Size Representation
153 The Equal Reel Size representation is that, by virtue of any or all of the three features set out at [148]-[150] above, a representation is made that the Dolphin Treasure EGM has five reels of equal size, with each reel having the same total number of symbols. The applicant contends that this representation is supported by the appearance of and sound emitted by the Dolphin Treasure EGM resembling an old-fashioned mechanical poker or slot machine, because these machines “could only ever have had evenly sized reels”, and because the Dolphin Treasure EGM is designed to evoke such machines. The sounds and images are also alleged to convey a “sense of regularity”, which includes the impression that the reels are each of the same size. The applicant alleges that this representation is contrary to the reality of the design of the machine, which I described at [84]-[87] above.
154 The applicant alleges that this representation is inconsistent with the reality of the machine’s design, which the applicant describes as the “Oversized Reel Feature”, referring to the fact that one reel has more stopping points on it than the others. As a result, the probability of achieving a winning result of five matching symbols on a pay line (or a combination of matching symbols and the sunrise symbol) is significantly less than would be the case if the Oversized Reel Feature did not exist, and significantly less than what members of the class of persons who play EGMs would expect based on the Equal Reel Size representation.
The Equal Symbol Distribution Representation
155 The Equal Symbol Distribution representation is that, by virtue of any or all of the three features set out at [148]-[150] above a representation is made that the total number of each of the symbols on the Dolphin Treasure EGM is as evenly distributed as possible across the five reels. For each symbol, the chance of that symbol appearing where a particular pay line intersects one of the five reels is as close as possible to equal across all reels. Again, this is supported by the “sense of regularity” which the applicant alleges is conveyed, in particular by the regular rate or pace of the reels spinning, the regular ticking sound, and the reels coming to rest at regular intervals from left to right. The applicant says that the impression created is that the “sense of regularity” extends to the frequency at which a particular symbol appears on each of the five reels. The applicant alleges that this representation is contrary to the feature I described at [88]-[92] above.
156 The applicant alleges that this representation is inconsistent with the reality of the machine’s design, being what she describes as the “Starved Reel Feature”, but which simply refers to the fact that some reels do not have many occurrences of particular symbols. She alleges that, as a result, the probability of achieving a winning result of five matching symbols on a pay line (or a combination of matching symbols and the sunrise symbol) is significantly less than would be the case if the Starved Reel Feature did not exist, and significantly less than what members of the class of persons who play EGMs would expect based on the Equal Symbol Distribution representation.
The Risk Representation
157 When a gambler presses the “information” button, the video screen displays the player information display. A screenshot of this is video screen is at [66]. That screen displays the “Total theoretical return to player of this game”.
158 The applicant claims that this RTP information conveys what she describes as the “Risk representation”: namely that:
(a) the risk in statistical terms that the person is undertaking by playing the Dolphin Treasure EGM is that the person will only retain 87.83% [if the RTP on a given machine is 87.83%] of the total money he or she wagers in any one session of play; and
(b) the risk in statistical terms that the person is undertaking by playing the Dolphin Treasure EGM is that the person will lose 12.17% of the total money he or she wagers in the session.
159 The applicant alleges that, contrary to this Risk representation:
the Return to Player Information reflects the return to the venue operator calculated by reference to a cycle of operation of the Dolphin Treasure EGM involving all possible permutations of play, a cycle that is irrelevant to the actual time spent by any one player playing the Dolphin Treasure EGM in any one session of play[.]
Members of the class to whom representations are said to be made
160 The applicant alleges that the s 18 claims are made about the Dolphin Treasure EGM in respect of “adult members of the public who are entitled to enter a licensed gaming venue and lawfully play an EGM, inclusive of the entire spectrum of such people from people who are playing for the first time, regular users, and very frequent users (including problem gamblers)”.
The s 18 claim as against Crown
161 The applicant claims that by making the Dolphin Treasure EGM available to be played by members of the public at Crown Casino, Crown has made the three representations to persons playing the Dolphin Treasure EGM. That is, in so far as the Dolphin Treasure makes representations, Crown makes those representations. She claims that it does so in the context of Crown obtaining the Dolphin Treasure EGMs on licence from Aristocrat (or purchasing them), putting Crown branding on the machines, putting them on the casino floor, and, in the words of Senior Counsel during final submissions, by “conducting a business of providing services for reward which involve using those machines and making them available for play; providing all of the physical requirements, including the venue, for that to occur; controlling and deciding how long they’re on the floor.” She claims that, contrary to Crown’s submissions, Crown is not a mere conduit of the EGMs. She also claims in the primary instance, it does not matter whether Crown has awareness of the representations as pleaded – it is sufficient that Crown has knowledge of the vision displayed and the sounds emitted during play and (I infer) has made a conscious decision to make machines with those features available on its floor.
162 In the alternative, the applicant claims that Crown does have knowledge of the representations as pleaded. This is on the basis of Crown’s requirements imposed on Aristocrat in relation to the supply of EGMs, Crown’s testing and installation of each EGM, and Crown’s day-to-day custody of the EGMs. Crown is said to therefore have constructive knowledge that the EGMs convey the pleaded representations.
163 In the further alternative, the applicant claims that, at least at the time of trial, Crown makes the Dolphin Treasure EGMs available for play knowing the content of the representations, and knowing their falsity. The applicant claims that Crown’s knowledge of the falsity of these representations is to be inferred from:
the fact that it operates the Crown Casino at which the Dolphin Treasure EGMs are made available for play;
an article in the public domain written by Kevin Harrigan, Vance MacLaren, Dan Brown, Mike J. Dixon and Charles Livingstone entitled “Games of chance or masters of illusion: multiline slots design may promote cognitive distortions”, published in International Gambling Studies on 21 May 2014;
its receipt of the letter of demand dated 5 September 2016 issued by the applicant, and the service of the statement of claim; and
if Crown is, or has been, in possession of the probability accounting records relating to the game sets programmed into the Dolphin Treasure EGM, then it also has knowledge of the “Oversized Reel Feature”.
164 The applicant does not claim accessorial liability against Crown.
The s 18 claim as against Aristocrat
165 In her claim against Aristocrat, the applicant alleges that it manufactures and supplies Dolphin Treasure EGMs to Crown in the knowledge of “every aspect of their inner workings” and “the way they appear to consumers”. She alleges that Aristocrat supplies the EGMs through ongoing licensing arrangements and receives performance reports from Crown. In light of this, her primary contention is that by supplying the Dolphin Treasure EGM to Crown, for use by the public, Aristocrat is engaging in conduct in contravention of s 18.
166 In the alternative, the applicant contends that Aristocrat is liable as an accessory or person involved in Crown’s contraventions of s 18. The applicant contends that this is on the basis that Aristocrat supplies the EGMs to Crown in the knowledge that they convey the misleading or deceptive representations alleged. This knowledge, it is alleged, is to be inferred from Aristocrat’s role as manufacturer of the Dolphin Treasure EGMs, as well as from its receipt of the letters of demand dated 5 September 2016 and 18 October 2016 and the service of the statement of claim.
The ss 20 and 21 claims
167 Both these claims are put by reference to a group of EGM gamblers the applicant describes as “Vulnerable Players”. The definition of the group, its utility and almost everything else about the applicant’s use of the group for the purposes of her ss 20 and 21 claims is put in issue by the respondents. It suffices to note here that “Vulnerable Players”, as pleaded by the applicant, are those gamblers of EGMs who are vulnerable to becoming “habituated” and/or “addicted” to playing EGMs. The meaning and use of the terms “habituated” and “addicted” by the applicant is also contested by the respondents.
168 The conduct impugned by these claims is Aristocrat’s conduct in manufacturing and supplying the Dolphin Treasure EGM to Crown to be made available for play, and Crown’s conduct in making the Dolphin Treasure EGM available for play at Crown Casino, in circumstances where the Dolphin Treasure EGM had or has five identified features or characteristics. Those include the three features which are also alleged to be the basis for the representations in the s 18 claim: namely, the Oversized Reel Feature, the Starved Reel Feature and the Return to Player Information.
169 In addition, the applicant relies on two other features or characteristics of the machines for the ss 20 and 21 claims: the lights, images and sounds made by the machines whenever sufficient symbols align in a manner that results in the gambler receiving a return (which the applicant refers to as “celebratory feedback”), and a feature the applicant describes as “Losses Appear as Wins”. A screenshot and description of this feature is at [62] above. The applicant, and some of the literature in evidence, also refers to this feature as “losses disguised as wins”. The respondents use the term “less than bet” wins to describe the same feature. The applicant contends that the “crux” of the unconscionable conduct case is the losses disguised as wins feature, in the context of the other features.
170 The applicant does not rely on a contravention of s 18 to prove her ss 20 and 21 case: she contends that even if the representations are not misleading or deceptive under s 18, the respondents’ conduct may nevertheless be unconscionable for the purposes of ss 20 and 21.
171 The applicant also relies on what she contends to be a close working and technical relationship between the respondents in relation to the supply by Aristocrat of EGMs to Crown. Crown and Aristocrat, it is contended, are in regular communication concerning the relative performance of Aristocrat’s EGMs at Crown Casino, including consideration of any underperformance of Aristocrat’s existing games and developing new games for Crown and Aristocrat’s mutual benefit. The EGMs are subject to specifications developed by Crown, including the specific RTP, the spin rate and game artwork.
172 The applicant contends that of the 38 Dolphin Treasure EGMs on the gaming floor at Crown Casino, six were the subject of an outright purchase from Aristocrat, and 32 were the subject of a “time on floor” plan set out in a master supply agreement. The time on floor licence payments by Crown to Aristocrat are constituted by initial and ongoing monthly fees, which are discounted if the monthly income generated by the time on floor games underperforms in comparison to the monthly income generated by the games of other suppliers in the relevant floor area of the casino. The applicant contends that the evidence shows that Aristocrat is paid for a particular EGM with a time on floor plan only for so long as Crown decides to retain that EGM on the floor of Crown Casino. These facts are employed by the applicant to contend, in substance, that there are deliberate and conscious choices made by Crown, in conjunction with Aristocrat, about (relevantly for this proceeding) what features of the Dolphin Treasure EGM form part of the impression the respondents wish to convey to the gambling public who use the machines.
The s 20 claim against Crown
173 The applicant claims that, in making the Dolphin Treasure EGMs available for play with the five identified features or characteristics, Crown engaged in unconscionable conduct under s 20, with respect to Vulnerable Players. She contends that these Vulnerable Players have a special disability or disadvantage, and that Crown knew or ought to have known of this special disability or disadvantage. This knowledge, the applicant claims, is to be inferred from the fact that Crown operates Crown Casino at which Dolphin Treasure EGMs are made available for play, and monitors the takings and use of those EGMs. She also alleges the knowledge should be inferred from publicly available articles on the neurological, psychological and physiological effects of EGMs. By making the machines available for play, Crown took advantage of the Vulnerable Players’ special disability or disadvantage, contravening s 20 of the ACL. This conduct occurred in the context of Crown obtaining the Dolphin Treasure EGMs on licence from Aristocrat (or purchasing them), putting Crown branding on the machines, and putting them on the casino floor to be made available for play as part of Crown’s business.
The s 20 claim against Aristocrat
174 The applicant claims that in manufacturing and supplying the Dolphin Treasure EGM to Crown Casino to enable Crown to provide it for play to members of the public with the five identified features or characteristics, Aristocrat is engaging in unconscionable conduct under s 20. The applicant claims that by this conduct, Aristocrat has taken advantage of the special disability or disadvantage of those Vulnerable Players. She claims that Aristocrat knows of the special disability or disadvantage of Vulnerable Players, which knowledge is to be inferred from Aristocrat’s role as manufacturer of the Dolphin Treasure EGM and publicly available articles on the vulnerability of Vulnerable Players, as well as on the neurological, psychological and physiological effects of EGMs. The applicant also relies on the fact that Aristocrat makes money from people playing its machines more frequently – not because increased play is connected directly to profits, but because more popular machines for a venue are likely to be ordered in the future. She also contends that the design features of the Dolphin Treasure EGM contribute to the process of “addiction”. The applicant claims it does not matter that Aristocrat may not have direct interactions with gamblers: “[t]he totality of the relationship, direct or indirect, between players and Aristocrat must be considered”, and the evidence shows, according to the applicant, that Aristocrat plays an “integral role” in getting machines to gamblers.
175 The applicant also contends that Aristocrat is liable as an accessory or person involved in Crown’s contraventions of s 20. She claims that the features critical to the s 20 case were designed and manufactured by Aristocrat. Given Aristocrat’s knowledge of those design features and responsibility for them, together with its knowledge of the special disability or disadvantage of the Vulnerable Players and its knowledge that Crown would make the machines available for play to the public, a finding of involvement should be made. In this way, the applicant alleges that Aristocrat had knowledge of all the essential elements comprising Crown’s unconscionable conduct.
The s 21 claim against Crown
176 The applicant also contends that, by making the Dolphin Treasure EGM available to Vulnerable Players, Crown has contravened s 21 of the ACL. In addition to the contention under s 20 that Crown took advantage of the special disability or disadvantage of Vulnerable Players, the applicant also contends that Crown’s conduct in making the EGMs available for play was unconscionable in all the circumstances because:
the Oversized Reel Feature, the Starved Reel Feature and the Losses Appear as Wins feature are “unfair tactics” not apparent to Vulnerable Players;
the Oversized Reel Feature and the Starved Reel Feature were not disclosed to Vulnerable Players; and
the Return to Player Information conveyed a misleading or deceptive representation to Vulnerable Players.
177 Alternatively, the applicant contends that Crown engaged in a “system of conduct or pattern of behaviour” which constituted unconscionable conduct under s 21 of the ACL. Relying on this contention, the applicant submits that it is not necessary for her to show that individual gamblers were in a situation of special disadvantage.
The s 21 claim against Aristocrat
178 The applicant’s claim against Aristocrat under s 21 is largely the same as its claim under s 20. As with her case against Crown, the applicant contends that Aristocrat’s conduct in manufacturing and supplying the Dolphin Treasure EGM to Crown, and to members of the public in Crown Casino, was unconscionable in all the circumstances because:
Aristocrat knows of the special disability or disadvantage of Vulnerable Players, as described above;
the Oversized Reel Feature, the Starved Reel Feature and the Losses Appear as Wins feature are “unfair tactics” not apparent to Vulnerable Players;
the Oversized Reel Feature and the Starved Reel Feature were not disclosed to Vulnerable Players; and
the Return to Player Information conveyed a misleading or deceptive representation to Vulnerable Players.
179 The applicant also contends that Aristocrat engaged in a “system of conduct or pattern of behaviour” which constituted unconscionable conduct under s 21 of the ACL, which also means there is no requirement to prove individual gamblers were in a position of special disadvantage.
The respondent’s overarching arguments
180 While Crown and Aristocrat rely on separate defences to the allegations against each of them, there are six overarching and common contentions in their defences.
181 First, in relation to both the s 18 and ss 20 and 21 cases, both respondents rely on the regulation of casinos and EGMs in Victoria, which I have set out above, and the fact that the impugned Dolphin Treasure EGMs have each been approved by the Commission. Aristocrat contends that the Dolphin Treasure EGMs are designed following the detailed specifications required in the various pieces of regulations, including the National Standard and the Victorian Appendix, and are approved by testers and the Commission. Similarly, Crown contends that all EGMs made available for play on the casino floor have been approved by the Commission, and that the EGMs are made available only in accordance with any conditions to which the approval is subject. Both respondents contend that the features complained of in this proceeding have been the subject of consideration by regulators and government bodies and have been approved with those features, and legislative choices have been made whether to enact any further or other regulation involving those features. Aristocrat submits that what the applicant is seeking, in substance, to do in this proceeding is to “have the court impose an extra layer of regulation on EGMs over and above that which the Parliament has seen fit to be imposed”. At a general level, the respondents say that for the applicant’s claim to succeed would be incompatible with the fact that the Dolphin Treasure EGMs are lawfully made available to play under a detailed regulatory and legislative scheme.
182 Second, in relation to the s 18 case, the respondents challenge the applicant’s claim that the pleaded representations are made by the Dolphin Treasure EGM. They each contend that the representations pleaded are not made, and further that an ordinary and reasonable gambler would not be so misled or deceived by the features of the Dolphin Treasure EGM. They contend that the pleaded representations are not supported by evidence but rather, are founded on speculation. In particular, they contend:
(1) there is no connection between the identified features of the “Even Reel Image”, the “Dispersed Symbols Image” and the “Spinning Reel Sound” and the representations said to be conveyed by those features. Specifically:
(a) there is no reason for a gambler to assume, based on the computer graphic of the matrix, that the animated reels are of any particular size relative to each other;
(b) the fact there is a consistent ticking sound and consistent size and speed of spinning symbols says nothing about the respective length of the reels of the EGM, and it tells the gambler nothing about the number of stopping points on each reel;
(c) the Dispersed Symbols Image does not convey any representation about the number of stopping positions on each reel, the number or distribution of symbols on each reel, or the comparative distribution of symbols across the five reels;
(d) the combination of those three features does not convey any representation about the distribution of symbols across the reels. Any such impression would be at odds with the information on the player information display, including the RTP percentage and the odds for the five highest and five lowest winning combinations. The information given to a gambler as to the probabilities of winning and losing suggests the variability of symbols;
(e) there is no “sense of regularity” conveyed by the sounds and images – the respondents contend that it is unclear what this “sense of regularity” is and how it would overcome the lack of connection between the features and the representations they are said to convey;
(2) the Risk representation is not conveyed by the RTP information, which follows the exemplar mandated by the National Standard. In addition to the contention that no evidence was led in relation to gamblers who understood the Risk representation to be conveyed, the respondents also contend that the representation is contrary to common sense as no one can predict the outcome of an indeterminate session when the results are determined by a random number generator. No reasonable gambler could draw a conclusion that every time a gambler walks away from the EGM, they will have exactly 87.83% (or whatever the RTP percentage is for a particular Dolphin Treasure EGM) of the amount they wagered. Crown emphasises the reference to “theoretical” on the player information display, which it says makes it clear that the RTP information is not personalised;
(3) detailed information is available on the Dolphin Treasure EGM, accessible at all times, which displays information including the chances of winning certain combinations of symbols, the amount of credit that can be won on certain combinations of symbols, the win lines and the game rules. Any reasonable gambler with sufficient interest in the game odds would be expected to check the information available to her or him; and
(4) no evidence was led of any individual having an understanding of how the game is designed and having understood the pleaded representations being conveyed, or evidence that any individual was actually misled in the manner alleged by the applicant. There was also no evidence that gamblers of the Dolphin Treasure EGM are familiar with old-fashioned mechanical poker machines, that they had reels of the same size and that the Dolphin Treasure EGM evokes in gamblers’ minds those old-fashioned mechanical poker machines. Crown, in particular, contends that this contrasts with the Crocodile Dundee case relied upon by the applicant (Pacific Dunlop Ltd v Hogan [1989] FCA 250; 23 FCR 553), where there was evidence from members of the public who were aware of the relevant knife scene in the film. Neither was there any evidence that a gambler of the EGM gained any impression of her or his actual chances of obtaining a winning outcome from the Dolphin Treasure EGM, so as to enable a comparison to be made to the actual mathematical chances, or that they were even interested in the odds of the games.
183 Third, in relation to the s 20 case, the respondents contend that the applicant has not pleaded any relationship between each respondent and any person, in respect of which a contravention of s 20 could apply. They contend that unconscionable conduct under s 20 could only be made out in respect of a particular person, because s 20 requires the scrutiny of a particular relationship between an innocent party and the defendant.
184 Fourth, in relation to both the ss 20 and 21 cases, the respondents challenge the class of “Vulnerable Players” as pleaded by the applicant. They challenge the existence of such a class, as well as its alleged characteristics, including whether and in what circumstance a gambler could be said to be “habituated” or “addicted”. They further challenge the “vagueness” of the class, and whether members of such a class could be said to have a “special disability” or “special disadvantage” for the purposes of the s 20 case. This challenge goes to the heart of the issues raised in the expert evidence, and I consider this later in these reasons.
185 Fifth, the respondents challenge the applicant’s characterisation of their business relationship, and contend that their relationship is a conventional, arm’s length business relationship. They contend there is nothing unusual or unconscionable about the fact that the parties monitor the performance of their products, and there is no evidence that the agreements between the respondents are unconventional in any material way.
186 Finally, both respondents contend that the commonness of the features of the Dolphin Treasure EGM mean that this proceeding has implications beyond the Dolphin Treasure EGM. Crown contends that if it is to be regarded as having made the representations, it would have the consequence that “every venue which made available EGMs in Victoria with any similar features, completely unaware of how the game software determined the probabilities of a win… would be making the representation themselves in contravention of the ACL.” Similarly Aristocrat contends that the impugned features of the Dolphin Treasure EGM are shared by all or most EGMs available for play in Victoria, and as a result, the potential implications of this case will affect EGMs other than merely the Dolphin Treasure. Although the respondents did not appear to limit this submission to relief, I consider that this submission necessarily goes more to relief than contravention.
Crown’s response to the individual allegations
To the s 18 claim
187 Turning to Crown’s particular response to the s 18 allegations made against it, Crown’s response broadly falls within two categories:
(1) the pleaded representations are not made, and are neither misleading nor deceptive – this category is common to Aristocrat’s response, however Crown makes further submissions in relation to any representation being dispelled by the brochures it makes available on the Crown Casino floor;
(2) if any representations are made, Crown is a mere conduit in making available the EGMs and those representations are made by Aristocrat in manufacturing and supplying the EGMs.
188 In relation to the first category, and in addition to the respondents’ common and overarching response outlined at [182] above, Crown contends that the applicant’s case relies on two additional “layers” in respect of the class of ordinary and reasonable persons who can lawfully play the Dolphin Treasure EGMs at Crown Casino, being:
the class is limited to an undefined group of longer term gamblers, because a reasonable amount of time is required before the “impressions” underlying the representations can be formed. On the applicant’s case, according to Crown, the casual or short-term gambler does not spend sufficient time playing the machine to form the relevant impressions; and
the reasonable person will have some knowledge of an old-fashioned slot machine. This contention is outlined at [182(4)] above.
189 Crown contends that, in relation to the first additional layer, over the period of time required for the “impressions” of evenness and regularity to be formed, a gambler of the EGM would actually experience real losses, which would contradict the alleged impressions and representations. This would also contradict any notion that the RTP is a guaranteed percentage return to the gambler in a given session.
190 Further, in addition to the information available on the player information display, Crown contends that there are brochures throughout Crown Casino at the information desks, the gaming floor entry points, and in brochure stands, which conveys generally the following information:
the odds are against the gambler and the EGM will always win;
the results of each game are random and determined by the computer program;
there is no requirement for an individual EGM to return the expected rate recorded in the “return to player” setting on the EGM in any given period of play; and
the “Playing the pokies – Know the facts” brochure sets out the precise chances of a gambler winning each kind of combination, that is five of a kind, four of a kind, three of a kind or two of a kind.
191 Crown contends that no gambler acting reasonably would arrive at, or rely on, the impressions alleged by the applicant when information such as that set out in the brochures is available.
192 Crown contends that the applicant’s counterfactual, which set out to determine what odds an EGM might have if symbols were spread out as evenly as possible across the reels, or the odds if the reels were each of equal size, produced an EGM game with an RTP of over 100%. Crown contends that no reasonable gambler would expect such an RTP, and in any case, an RTP of over 100% is contrary to the Victorian requirements that the RTP not be higher than 99.99%.
193 In relation to the Risk representation, Crown contends that the applicant’s case sought to advance a new and unpleaded case that the RTP information was not as clear or not as extensive as it could be. Crown contends that there is no evidence that this supposed shortcoming would mislead anyone, and this is insufficient for the purposes of s 18.
194 Crown further contends that the Risk representation is a representation as to a future matter – that is, the risk in statistical terms of the money that a person will retain in their session of play. Crown submits that this does not reflect the true facts, and for that reason alone, this allegation must fail. Crown submits that this is because the representation is as to a matter of fact – it is about the way the EGM is actually programmed. A future representation could not be conveyed when it is made plain that each play is random and it is not possible to predict the outcome of any session of play. In any case, Crown submits if the Risk representation is made, it has a reasonable basis for making that representation, being the fact that the RTP is set by Aristocrat, within a range described in the regulations and in Crown’s EGM specifications, and are tested and approved by the Commission before being made available for play.
195 In relation to the second category of response, Crown contends that it acted as a mere conduit in making the Dolphin Treasure EGM available for play. Crown contends that even if the pleaded representations are conveyed, they are made by Aristocrat as the designers of the game, and not by Crown. Crown’s impugned conduct consists only of making available the Dolphin Treasure EGMs to be played at Crown Casino. Crown relies on Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; 249 CLR 435 for this submission, contending that the facts here are analogous to Google. It contends that, like Google, it cannot modify the representations being made through the EGMs and cannot be considered to have endorsed the EGMs by placing them in its gaming venue. It has not modified the Dolphin Treasure EGM in any way, or specified any modifications to Aristocrat which suggest it has been endorsed by Crown. The fact that the EGM contains Crown branding is not enough to show endorsement of the internal workings of the software that are unknown to it. This is especially so given that the Dolphin Treasure EGM is available in gaming venues across Australia: once it is accepted that ordinary and reasonable gamblers understand that the same EGM games are available for play at venues throughout Australia, they would understand that the Dolphin Treasure EGM is not Crown’s game. The EGM bears Aristocrat’s branding and emits the standard winning sounds developed by Aristocrat.
To the s 20 claim
196 Crown’s submissions in relation to the s 20 claim largely fall within three broad categories:
(1) the unconscionable conduct case concerns hypothetical persons and not any relationship between an actual individual and Crown;
(2) the five characteristics identified by the applicant in her unconscionable conduct case (see [168]-[169]) do not relate to any conduct by Crown, and cannot form the basis for her unconscionable conduct case against Crown; and
(3) Crown disputes the characteristics of the Vulnerable Players class. Even if it is found that the law recognises the special disability or disadvantage of the Vulnerable Players, Crown denies knowledge of that special disability or disadvantage, and therefore denies it took advantage of that disability or disadvantage.
197 First, it contends in common with Aristocrat that the applicant has not pleaded any relationship between it and any person, in respect of which a contravention of s 20 could apply. The applicant, according to Crown, has not pleaded a case against Crown relating to her own particular circumstances, because she has never gambled at Crown. It contends that none of the witnesses called by the applicant gave any specific evidence of having gambled on the Dolphin Treasure EGM at Crown Casino, and no other evidence was adduced about people in the class gambling on the Dolphin Treasure EGM at Crown Casino. None of the witnesses called gave any evidence of having been clinically diagnosed with a gambling disorder or any other condition, and there was no evidence from any medical professional about any gambler of a Dolphin Treasure EGM having been diagnosed with such conditions. There was also no evidence that any of the witnesses were “addicted” to the Dolphin Treasure EGM by reason of Crown’s conduct. The case against Crown, it is contended, proceeds entirely by reference to a hypothetical gambler.
198 Second, it contends that the five characteristics identified by the applicant do not relate to any conduct by Crown. They are design features inherent in the game that Aristocrat has designed: Crown’s conduct is limited to the making available of an authorised Dolphin Treasure EGM on the Crown Casino gaming floor.
199 Crown contends that the five characteristics also do not amount to any unconscionable conduct in that:
(1) in relation to the first two characteristics, the Oversized Reel Feature and the Starved Reel Feature are unknown to gamblers of the EGM, and other than the service of the letter of demand in this proceeding, it is not alleged that these features were previously known to Crown;
(2) in relation to the third characteristic, the RTP information was available to gamblers and to Crown in the same form, being the form authorised and required by the regulation;
(3) in relation to the fourth characteristic, the duration of the tunes and the display varied with the size of the win, and occurred only as the win meter was incrementing. These facts were visible and comprehensible by the gambler, and Crown had no greater information than the gambler concerning the nature and circumstances of the visual and audio display;
(4) in relation to the fifth characteristic, being the Losses Appear as Wins characteristic, the possibility of placing multiple bets on multiple lines, and experiencing a small win which was exceeded by the amount wagered was an inherent feature of multi-line betting, and a feature that was obvious to any gambler. Crown contends that even if this were not obvious, it is spelled out to the gambler as she or he watches the meter increment, since that meter discloses the precise amount of the win as compared to the aggregate sum wagered. The gambler is told, according to Crown, whether the win is exceeded by the net outlay on the multiple betting lines. Crown contends that none of these matters are concealed or masked from the gambler, and that in itself is sufficient to put an end to the ss 20 and 21 case.
200 Third, Crown contends that there is no evidence that Crown knew about the particular addiction or habituation pleaded in relation to the Vulnerable Players, and did not take advantage of any such disability or disadvantage. Broadly, Crown contends that the applicant’s concepts of “addiction” and “habituation” are misplaced, there being only one diagnosable condition of “gambling disorder”. The defined term of “Vulnerable Players”, which uses the terms “habituated” and “addicted”, is therefore inconsistent with the gambling disorder condition. “Problem gambling”, which is referred to in the applicant’s evidence, is not a recognised condition, according to Crown.
201 Even if it is accepted that the class of Vulnerable Players suffered from a special disability or special disadvantage in the sense pleaded, Crown contends that it could not be said that it knew about that disability, or that it took advantage of that disability. Crown contends that it is not credible that Crown was put on notice of these issues from the day it received the letter of demand on 5 September 2016, which attached the article by Kevin Harrigan, Vance MacLaren, Dan Brown, Mike J. Dixon and Charles Livingstone entitled “Games of chance or masters of illusion: multiline slots design may promote cognitive distortions”. Crown claims the applicant has misunderstood the key theories set out in that article, which had nothing to do with the pleaded features of the Dolphin Treasure EGM.
202 Crown contends that no predatory conduct is made out. For this set of contentions, Crown relies on Kakavas v Crown Melbourne Ltd [2013] HCA 25; 250 CLR 392. Crown emphasises its contention that its conduct was merely to make the Dolphin Treasure EGM available with identified features, in the context of the regulatory regime within which Crown operates, the information which is available on the player information display as to the precise odds of the game, and the information in the brochures on the gaming floor. Crown further contends that it delivers gambling services in a responsible manner, including the training of Crown staff to identify problem gambling behaviours, and to report it to a Responsible Gaming Liaison Officer. The applicant’s case, according to Crown, ignores Crown’s Responsible Gaming Support Centre, which works to ensure that gambling at Crown is undertaken in a responsible manner. Crown further contends that it encourages gamblers to take regular breaks, by way of a “Have you had a break?” reminder which appears on the display of each EGM, and that it has a self-exclusion process available to gamblers to voluntarily ban themselves from the Casino.
203 Crown submits that focusing on the features of the Dolphin Treasure EGM distracts from the key point that a gambler comes to a casino having made a conscious choice to do so: there are numerous voluntary decisions made by the gambler which took her or him to the stage at which they gamble.
204 Crown submits that its actions therefore do not involve any degree of moral taint and cannot constitute unconscionable conduct. It emphasises that it conducts a “lawful business” at the Casino and is doing no more than making approved EGMs available for play in accordance with the regulations.
To the s 21 claim
205 Crown’s submissions in relation to s 21 are the same as its submissions under s 20, except in relation to the different tests for unconscionability as between ss 20 and 21.
206 In relation to the lack of a defined individual subject to the alleged unconscionability, Crown submits that s 21(4)(b), which provides that s 21 unconscionable conduct is capable of applying to a system of conduct or pattern of behaviour, does not mean that an unconscionable conduct case can be raised in the abstract. Crown submits that the uncertainty surrounding the parameters of the class of Vulnerable Players nevertheless has implications for the identification of the special disability or inequality of bargaining positions, whether the special disability was sufficiently evident to Crown, the steps that Crown could take and has taken, and the relevant circumstances between the parties.
207 Crown also submits that the applicant has failed to address the matters set out in s 22, which provides a non-exhaustive list of matters which the Court may have regard to in determining the application of s 21. Crown submits that all of those matters in s 22 must be considered as a whole – the applicant cannot “pick and choose” from the matters set out in that list.
208 Finally, although s 21 is not confined by equitable concepts, Crown submits that unconscionable conduct in both ss 20 and 21 encompass equitable concepts, and that it would curious if “unconscionable” in the two provisions had different meanings. Unconscionability under s 21 similarly requires a high level of moral obloquy or moral tainting, which is not present on the evidence.
The s 131C argument
209 Crown also makes a submission concerning the interpretation of ss 18, 20 and 21 of the ACL, in light of the Victorian regulatory framework, by reference to s 131C of the Competition and Consumer Act 2010 (Cth). That section provides:
131C Saving of other laws and remedies
(1) This Part is not intended to exclude or limit the concurrent operation of any law, whether written or unwritten, of a State or a Territory.
(2) Section 73 of the Australian Consumer Law does not operate in a State or a Territory to the extent necessary to ensure that no inconsistency arises between:
(a) that section; and
(b) a provision of a law of the State or Territory that would, but for this subsection, be inconsistent with that section.
(3) Despite subsection (1):
(a) if an act or omission of a person is both:
(i) an offence against this Part or the Australian Consumer Law; and
(ii) an offence against a law of a State or a Territory; and
(b) the person is convicted of either of those offences;
he or she is not liable to be convicted of the other of those offences.
(4) Except as expressly provided by this Part or the Australian Consumer Law, nothing in this Part or the Australian Consumer Law is taken to limit, restrict or otherwise affect any right or remedy a person would have had if this Part and the Australian Consumer Law had not been enacted.
210 Crown contends that s 131C, in particular subs (1) and (4), is to be read as an “interpretive rule” as to how ss 18, 20 and 21 of the ACL are to be applied in the context of Victorian statutes that authorise certain acts being performed subject to certain conditions. It forms part of the surrounding facts and circumstances relevant to whether contraventions of ss 18, 20 and 21 have been made out. Crown contends that the ACL is not to be interpreted as making unlawful the acts which are otherwise authorised by Victorian law, and which would not be regarded by a Victorian court applying the Victorian ACL as a contravention of the “harmonious provisions” of the Victorian legislation. In substance, Crown’s submission is that the only conduct impugned against it is that it makes available the Dolphin Treasure EGMs on its casino floor, conduct which it says it has a right to under Victorian law. Section 131C operates as an interpretive rule with the result that Crown’s conduct is done as of right under Victorian law, and “legislated harmony” preserves Crown’s right under Victorian law to make available the Dolphin Treasure EGMs.
Aristocrat’s response to the individual allegations
To the s 18 claim
211 Turning to Aristocrat’s responses to specific allegations against it, its response to the s 18 allegations falls under two categories:
(1) the pleaded representations are not made, and if made are neither misleading nor deceptive – this category is common to Crown’s response. Aristocrat accepts that, if the pleaded representations are made, they are false; and
(2) in the event that Crown is found liable for contravention of s 18, the applicant has not proven that Aristocrat had the necessary knowledge of Crown’s wrongful conduct for it to have accessorial liability.
212 As to the first category, Aristocrat’s submissions are largely in line with Crown’s submissions, as outlined at [182] above, albeit with some additional submissions. Aristocrat contends that in relation to the mathematical odds, reel length by itself says nothing of the probabilities. Reel length is not determinative of the RTP, and manipulating the reel length independently of symbol distribution is “mathematically incoherent”. The same is said to apply if symbol distribution were dealt with independently of reel length. Further, Aristocrat submits that the gambler’s experience is not altered by changing the reel length. Even if all reel sizes were made the same, it would appear no differently on the screen to the gambler: the gambler’s experience would remain the same.
213 Aristocrat also contends that there is no evidence that gamblers pay any attention to the “ticking” sound when playing the Dolphin Treasure EGM: indeed it is barely audible, if at all, at a gaming venue. Aristocrat submits that this is supported by the Court’s view, in which the “ticking” sound could not be heard when the EGM was played on the main gaming room floor, and only faintly when it was played in the members-only Teak Room. No reasonable gambler, according to Aristocrat, would extrapolate from this sound, along with the general “sense of regularity” of symbols being roughly the same size, spinning at the same rate and coming to a rest at even intervals, any conclusion or impression about the inner workings of the game or their probabilities of winning.
214 In relation to the Risk representation, Aristocrat accepts that some gamblers who access the player information display do not understand the meaning of the theoretical RTP, but Aristocrat submits that “to be ignorant or confused is not to be misled”. A reasonable gambler in that instance would either disregard the RTP or seek clarification as to its meaning, such clarification being available in the brochures at Crown or on the internet.
215 As to the second category, Aristocrat’s primary contention is that the claims against Crown must fail, and so the applicant’s claims of accessorial liability against Aristocrat must also fail. In the alternative, if Crown is found to have contravened s 18 of the ACL, Aristocrat submits it has not aided or abetted those contraventions, nor has it been knowingly concerned in or party to the contraventions. Aristocrat submits that in order for accessorial liability to be made out, Aristocrat must be proven to positively know the misleading or unconscionable nature of Crown’s alleged conduct: such knowledge, it submits, has not been proven. Instead, the evidence establishes that Aristocrat does not exercise any control over whether and how the Dolphin Treasure EGM is made available to Crown’s patrons. It has no control over the environment in which the EGM is presented to gamblers, including any decision to place additional information on the EGMs or make brochures available next to each EGM.
216 Aristocrat also contends that it does not engage in profit-sharing with Crown, and that, while there are discount arrangements in place for underperforming EGMs, Aristocrat does not derive any revenue referable to the turnover on its EGMs on the floor of Crown.
To the s 20 claim
217 Aristocrat’s submissions in relation to the s 20 claim fall within four broad categories:
(1) the unconscionable conduct case concerns hypothetical persons and not any relationship between an actual individual and Aristocrat;
(2) in any case, the lay evidence establishes that there is no intention on the part of Aristocrat (and, Aristocrat submits, on the part of Crown) for the Dolphin Treasure EGM to have the effect of causing people to become habituated or addicted to playing the EGM, or knowledge that it does so;
(3) as with Crown, Aristocrat disputes the characteristics of the Vulnerable Players class and contends that, even if it is found that the law recognises the special disability or disadvantage of the Vulnerable Players, it denies knowledge of that special disability or disadvantage, and therefore denies it took advantage of that disability or disadvantage;
(4) in the event that Crown is found liable for contravention of s 20, the applicant has not proven that Aristocrat had the necessary knowledge of Crown’s wrongful conduct for it to have accessorial liability.
218 In relation to the first category, Aristocrat simply submits that the applicant has not pleaded any relationship or transaction between Aristocrat and any person, including the applicant, in respect of which a Court in equity could grant relief, and the claim must therefore fail. For this contention, Aristocrat relies on French J’s (as his Honour then was) decision in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2; 96 FCR 491, where his Honour said at [42]:
There is no rule of equity which prohibits unconscionable conduct. Rather there are remedies available to relieve against or prevent such conduct in certain classes of case. The Act, however, creates a prohibition. What then does it prohibit? It prohibits conduct in respect of which a judge in equity would have been prepared to grant relief. The imposition of the prohibition precedes any actual or notional judicial decision. The judge deciding a case under s 51AA will be asking himself or herself whether he or she would have been prepared to grant relief at equity on the basis of an assessment of the conduct in question as unconscionable.
219 Aristocrat submits that in any case, “special disability” or “special disadvantage” cannot be determined, as a matter of equity, in the abstract.
220 In relation to the second category, Aristocrat submits that of the applicant’s six lay witnesses (that is, other than Dr Livingstone), none testified that any of the impugned features of the Dolphin Treasure EGM were the cause of their gambling problems. Aristocrat submits that the witnesses pointed to other factors, including due to the medication Permax (Ms Sommerville) and difficult life circumstances (Ms Mitchell, Ms McLaughlin, Ms Bardsley). Aristocrat also submits that none of the witnesses, with the exception of Ms Sommerville, testified to having lost the capacity for voluntary action, in the sense of being unable to resist the temptation to play the Dolphin Treasure EGM. To the extent that some witnesses did depose to having a lack of control (for example, Ms Mitchell, Ms McLaughlin and Ms Bardsley), Aristocrat claims that this evidence should be understood to be colloquial expressions used by the witnesses rather than any genuine lack of volition, in the sense used by its experts in their evidence.
221 Aristocrat submits that the evidence of Ms Bryant also indicates that Aristocrat did not seek to induce addiction in gamblers. Aristocrat submits that Ms Bryant’s evidence provided a detailed description of the process of designing an EGM game, and that no part of the design is directed towards the habituation or addiction of any gambler. Aristocrat relies on her evidence that it is a consideration when designing games that Aristocrat does not build anything into the games that are thought to be harmful to gamblers.
222 In relation to the third category, as with Crown, Aristocrat makes submissions in relation to the characteristics of Vulnerable Players. I consider this in further detail later in these reasons, when I consider the findings of the expert evidence.
223 Regardless of the characteristics of the Vulnerable Players class, Aristocrat contends that it does not have knowledge of the pleaded characteristics of the Vulnerable Players. It contends that, to the extent that the applicant submits that Aristocrat has knowledge about features of the Dolphin Treasure EGMs being habituating or addictive based on academic papers discovered in Aristocrat’s possession, Aristocrat claims that the applicant is cherry picking individual studies and ignoring qualifications or limitations to those studies. Aristocrat claims that its conduct could not be said to be unconscionable in light of the fact that there is a paucity of evidence in relation to whether there are features of EGMs said to be habituating or addictive.
224 Finally, Aristocrat makes the same submissions in relation to accessorial liability for s 20 as it does for s 18, adding that, in respect of s 20, there is no evidence that Aristocrat has knowledge that Crown knows of and takes unconscientious advantage of its patrons.
To the s 21 claim
225 Aristocrat submits that s 21 is limited in its scope to prohibiting unconscionable conduct as between suppliers and customers in connection with the supply of goods or services by the former to the latter. It contends that no such supply is pleaded in this case against Aristocrat. Aristocrat’s supply of the Dolphin Treasure EGMs in this case is limited to Crown, and Vulnerable Players are third parties to that supply. Any alleged unconscionable conduct by Aristocrat is therefore not “in connection with” Aristocrat’s supply of EGMs to Crown. Section 21 therefore has no application to Aristocrat.
226 To the extent that the Court is required to assess Aristocrat’s conduct in relation to s 21, Aristocrat relies on the Full Court’s decision in Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90, where the Court (Allsop CJ, Jacobson and Gordon JJ) said (at [23]):
The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. The content of those values is not solely governed by the legislature, but the legislature may illuminate, elaborate and develop those norms and values by the act of legislating, and thus standard setting.
227 Aristocrat submits that the fact that the legislative and executive are apprised of the matters raised in the unconscionable conduct claim and have either enacted or declined to enact legislation concerning those matters is of relevance in determining the societal values by which Aristocrat’s conduct falls to be judged.
228 Aristocrat’s submissions with respect to the accessorial liability claim under s 21 are the same as for s 20.
Aristocrat’s “formal” submissions
229 Aristocrat also makes two “formal” submissions. First, it submits that the granting of declaratory relief, at least if not granted in conjunction with injunctive relief, would not be a proper exercise of judicial power, notwithstanding the terms of s 232(2) of the ACL. Aristocrat submits that this is because the declaratory relief would quell no real controversy and produce no foreseeable consequence for the parties. This is especially so, Aristocrat submits, in respect of the relief sought in relation to past conduct and under repealed legislation. Aristocrat relies on Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; 200 CLR 591 and Gardner v Dairy Industry Authority (NSW) (1977) 18 ALR 55 for these submissions.
230 Second, and more fundamentally, Aristocrat submits that notwithstanding Crown’s admission otherwise, Crown is not engaging in conduct in trade or commerce in providing EGM services to patrons, as gambling is “by its nature” neither trade nor commerce.
231 As Aristocrat submits, these submissions require the Court to consider matters subject to “contradictory, incomplete or inconclusive” High Court authority. As I dispose of this proceeding on other grounds, Aristocrat’s formal submissions need not be addressed.
The evidence
232 The parties adduced a great deal of documentary evidence, a number of affidavits, and a number of expert reports.
Applicant
233 The applicant filed affidavits from six lay witnesses, including a supplementary affidavit which was filed with leave on the first day of the hearing. Each of these lay witnesses deposed to their personal experience with poker machines, as I set out at [25]-46] above. The witnesses are as follows:
(1) Shonica Guy, the applicant, affirmed an affidavit on 26 May 2017.
(2) Anna Helen Bardsley affirmed an affidavit on 25 May 2017.
(3) Catherine Anne Sommerville affirmed an affidavit on 26 May 2017.
(4) Cornelia McLaughlin affirmed an affidavit on 25 May 2017.
(5) Libby Mitchell swore an affidavit on 26 May 2017, and a supplementary affidavit on 12 September 2017. I granted leave for Ms Mitchell’s supplementary affidavit to be filed at the commencement of trial, as part of it consisted of corrections to her first affidavit, and the other part consisted of limited additional evidence.
(6) Robert John Ingmire affirmed an affidavit on 25 May 2017.
234 On the first day of trial, the applicant sought leave to adduce further evidence-in-chief from each of these witnesses in person. This application was supported by an affidavit of the applicant’s legal representative, Jennifer Kanis, filed on 12 September 2017. The reason for this application was so that the witnesses could address “the substance of objections to the admissibility of parts of their evidence made by the respondents”. I refused leave for the further oral evidence, largely on the basis that there would be a real risk of unfairness to the respondents for leave to be granted because they had based their forensic decisions about how to conduct their cases on the applicant’s evidence as it stood at the commencement of trial.
235 The applicant also filed a lay affidavit from Dr Charles Henry Livingstone. The respondents objected to this affidavit in its entirety. Dr Livingstone, who is the Senior Lecturer in the Department of Epidemiology and Preventive Medicine at Monash University, affirmed an affidavit on 26 May 2017 deposing to his research as to probability records of poker machines, his observations of the Dolphin Treasure EGM, and his understanding of problem gamblers. His evidence was objected to particularly on the basis that he was not an independent expert, given that he had provided assistance to the applicant’s legal representatives in the conduct of this case, and until 2017 was on the board of the Alliance for Gambling Reform. I ruled much of Dr Livingstone’s affidavit inadmissible, largely on the basis that Dr Livingstone did not, and had no capacity to, comply with Pt 23 of the Evidence Act 1995 (Cth): see Guy v Crown Melbourne Limited [2017] FCA 1104.
236 The applicant also filed expert reports from three expert witnesses:
(1) Associate Professor Kevin Harrigan prepared three reports dated 3 May 2017, 29 July 2017 and 27 August 2017. Associate Professor Harrigan is a Research Associate Professor, Digital Arts Communication and Co-Founder and Co-Director of the Gambling Research Lab at the University of Waterloo. He gave evidence in relation to the calculations concerning the likelihood of achieving particular winning outcomes, his experience in multi-line betting modes compared to single pay line betting modes, and the theoretical RTP.
(2) Professor Murat Yücel prepared one report dated 21 May 2017. Professor Yücel is an Australian registered psychologist, and leads the Addiction research program and directs the Brain and Mental Health (BMH) Laboratory at Monash University. He gave evidence in relation to gambling “habituation” or “addiction”, psychological impacts of addiction to playing EGMs, design features of EGMs which may contribute to habituation or addiction, and whether the Dolphin Treasure EGMs contain any such design features.
(3) Dr Russell Deighton prepared two reports dated 22 May 2017 and 31 July 2017. Dr Deighton is a Senior Lecturer and Clinical and Research Supervisor at the Cairnmillar School of Psychology, Counselling, and Psychotherapy. Dr Deighton gave evidence in relation to the psychological and psychosocial effects of problem gambling, and treatment for individuals who are habituated or addicted to EGMs.
237 Although Associate Professor Harrigan’s report assumed particular prominence both in how the applicant’s case was formulated, and in the initial way in which she sought to prove her allegations, as the case developed, it became apparent that the granular detail of his report, while necessary to sustain the applicant’s allegations as against all the Dolphin Treasure EGMs on the floor at Crown, and while also necessary for the respondents to understand how the case was put, assumed less significance in the Court’s deliberations on whether the allegations were made out. By the time of trial, the parties were co-operating to a significant degree in narrowing the issues in dispute, both factual and legal. As a result of this co-operative process, some documents were tendered which represented a joint position especially as between the applicant and Aristocrat, as to the configuration and workings of the Dolphin Treasure EGM. This obviated the need for Associate Professor Harrigan to be cross-examined (he is resident in Canada), and it also obviated the need for the complexities of his report to be explored in detail. The parties’ co-operation on matters such as this was precisely the kind of co-operation the Court’s practice notes encourage parties to adopt and can be held up as an admirable example – in a hotly contested proceeding with much at stake – of how parties can advance the interests of the administration of justice by such co-operation, ensuring the most effective use of the time and resources of all involved in the litigation.
Crown
238 Crown filed affidavits from two lay witnesses, both of whom are employees of Crown:
(1) Attila Seci, Business Development Manager, Gaming Machines Product at Crown, swore an affidavit on 10 August 2017, deposing to Crown’s procedures in relation to the testing, purchase and installation of EGMs, as well as the “player information” that is available on the Dolphin Treasures EGM.
(2) Sonja Bauer, Group General Manager, Responsible Gaming at Crown, swore an affidavit on 9 August 2017, deposing to Crown’s Responsible Gaming Support Centre, staff training in relation to responsible gaming, and customer support.
239 No expert evidence was filed by Crown.
Aristocrat
240 Aristocrat filed affidavits from three lay witnesses, each of whom are employees of Aristocrat:
(1) Natalie Jane Bryant, Executive Producer and Special Projects at Aristocrat, affirmed an affidavit on 4 August 2017, deposing to Aristocrat’s business structure, a general background on EGMs, the regulatory framework regarding EGMs, and the design and testing of EGMs. She also responds to Associate Professor Harrigan’s report.
(2) Sudhir Nagappa Pai, International Product Compliance Manager at Aristocrat, affirmed an affidavit on 4 August 2017, deposing to the regulatory environment regarding EGMs in various jurisdictions and the testing of EGMs. Prior to joining Aristocrat, Mr Pai was previously employed by BMM Australia Pty Ltd, which is an accredited testing facility for EGMs. He also deposes to his experience working as a tester at BMM.
(3) Trevor Martin Ross, Business Development Manager – Strategic Accounts at Aristocrat, swore an affidavit on 4 August 2017, deposing to Aristocrat’s business relationship with Crown.
241 In addition to the lay witnesses, Aristocrat also filed reports from two experts:
(1) Professor Robert Ladouceur prepared a report dated 3 August 2017. Professor Ladouceur is Professor Emeritus at the School of Psychology at Université Laval in Quebec, Canada. Professor Ladouceur gives evidence in relation to gambling “habituation” and “addiction” and other terms used in psychology in relation to problem gambling, the identification of gambling disorders and its causes, whether playing on EGMs is a “voluntary” act, and responds in particular to Professor Yücel and Dr Deighton’s reports.
(2) Professor Lia Nower prepared a report dated 26 July 2017. Professor Nower is Professor and Director at the Center for Gambling Studies at Rutgers University in New Jersey, USA. Professor Nower was asked the same questions as was asked of Professor Ladouceur.
The joint expert report
242 Shortly before the trial commenced, the experts attended a joint conference with a view to attempting to agree on aspects of nine questions asked of them, which I set out at [274] below. Following the conference, the experts prepared and the parties filed a joint report, which was tendered into evidence.
The documentary evidence
243 The documentary evidence, and the affidavits, were all contained in an electronic court book which was continually updated following rulings and the parties’ decisions about the tender of documentary evidence. The Court book reached final form only on the last day of trial, on 28 September 2017, and was admitted into evidence as a single exhibit, comprising all of the evidence on which the parties relied, together with the pleadings, submissions and other such documents.
244 The documentary evidence tendered ran to just under 42,000 pages of documents. Some of these documents are subject to directions under s 136 of the Evidence Act that they be admitted for a limited use. Broadly, the documentary evidence consists of:
photos of the Dolphin Treasure EGM showing various screens, such as the player information display and the game rules;
two videos of the Dolphin Treasure EGM being played in Aristocrat’s offices in North Ryde, NSW;
audio files of sounds heard on the Dolphin Treasure EGM as it is played;
reel map configurations for the Dolphin Treasure EGM;
spreadsheets and tables providing statistical information on the Dolphin Treasure EGM, such as probabilities of particular prizes, the return to player, winning combinations, symbol distribution on reel strips, as well as “counterfactual” datasets on how the various probabilities of winning would change with equal symbol distribution and equal reel size;
brochures available at the Crown Rewards information desk, providing gamblers with information as to the poker machines;
documents available online, but not available at Crown, including information booklets created by the Victorian Government in relation to poker machines;
compliance requirements and checklists for EGM testing;
applications for approval of, and actual approvals of, the Dolphin Treasure EGM, including approvals of variations and updates to the EGM;
regulatory-type documents, including the National Standard and the Victorian Appendix, reports of inquiries, point-in-time legislation, Hansard extracts, assessments and annual reports of the Victorian Commission for Gambling Regulation, Productivity Commission and other bodies, and submissions to various gambling inquiries;
some 300 journal articles, studies, surveys and various research reports referred to by the expert and lay witnesses, as well as those produced in discovery. Many of these articles, studies, surveys and reports are subject to a s 136 direction that they are admitted for the limited basis that the applicant relies upon them to demonstrate the alleged knowledge of the matters by Crown or Aristocrat, as the case may be. Others are subject to a s 136 direction that they are admitted for the limited basis that the documents constitute materials to which the expert witnesses referred in formulating their opinions;
focus group results, market research studies and presentations commissioned by Aristocrat; and
contracts and supply agreements between Aristocrat and Crown for the purchase or license of the Dolphin Treasure EGMs, including master supply agreements containing licence payments, time on floor plans, and software and hardware specifications.
245 The videos of the Dolphin Treasure EGM being played at Aristocrat’s offices in particular were referred to frequently throughout the hearing, both by the parties in their submissions, and on my direction, to assist the Court with understanding the way the machine works.
The Court’s view at Crown Casino
246 Prior to the commencement of trial, the parties agreed on a protocol for a view by the Court pursuant to s 53 of the Evidence Act, at Crown Casino. I accepted a view was appropriate. On 13 September 2017, the Court attended the Crown Casino complex for a view at 2 pm, accompanied by junior counsel for each of the parties. The Court was led by junior counsel for Crown from location to location in accordance with the agreed protocol. The Court was also provided a ticket credited with $200 for use on the Dolphin Treasure EGMs the subject of the view, which was returned to Crown’s counsel at the end of the view. The view was also recorded on video by a third party provider, who recorded the session on the two Dolphin Treasure EGMs. A copy of the video recording was tendered into evidence.
247 In brief, the view consisted of the following:
The Court entered the main casino floor through the food court at Crown, passing the Crown Rewards information desk, and observing the presence of and availability of brochures.
The Court proceeded from the Crown Rewards information desk across the main casino floor, to location D4909, where the Court was shown the Dolphin Treasure EGM with serial number 679791. Counsel for Crown showed the Court the key features of the machine, including the player information display, the game rules, the tracking session information, and various combinations of betting, including single and multi-line betting, on 1 credit and 5 credits per line. I then used the machine myself, placing various bets and utilising the single and multi-line betting functions, and the various credit levels, for which the machine provides.. I also accessed the player information display.
The Court then proceeded to the Teak Room, a members-only area, to location G1801, where the Court was shown the Dolphin Treasure EGM with serial number 679405, which was the pleaded Dolphin Treasure EGM referred to in the amended statement of claim. The same process was undertaken here as for the other Dolphin Treasure EGM.
The Court then proceeded to the Crown Responsible Gaming Support Centre, passing the brochure stand on the way out of the main casino floor. I was shown around the Centre, and the view was then concluded.
248 In closing submissions, all parties invited the Court to rely on what it had seen, heard and observed during the view, including the drawing of inferences. As these reasons disclose, I have made use of what occurred on the view in a variety of ways, but at points I have also declined to draw inferences from the view, where I consider the view did not provide an adequate or sufficient basis for the contended factual inferences.
Confidentiality orders
249 Each of Crown and Aristocrat sought orders under s 37AF of the Federal Court of Australia Act 1976 (Cth) in relation to a range of documents tendered. Interim orders were made under s 37AI at the time the evidence was tendered, and the parties sought to agree on the terms of ongoing orders, and the documents to which they should apply. Ultimately, some agreement was reached, but the parties remained apart on some issues. The Court must in any event be satisfied such orders are appropriate on an ongoing basis, although the fact that orders are agreed is a factor of some weight: see Deane J in Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 254; and Perram J in Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 at [18].
250 Save for the rulings I give below in relation to the documents on which there is no agreement, I am otherwise satisfied orders under s 37AF as agreed between the parties are appropriate. The documents over which there is agreement are all documents in which the commercial interests of Crown, or Aristocrat, may be threatened or prejudiced if the documents were publicly available. It is inappropriate for a proceeding such as this to “become a vehicle for advantaging or prejudicing trade rivals”: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23]. That factor may have added weight in a case such as this, where the “trade rivals” have incurred no costs or inconvenience in participating in the proceeding, but may simply be watching from the sidelines, and able to reap the benefit of the respondents having to comply with the Court’s discovery and trial processes, in a case clearly brought to advance a public interest identified by the applicant.
251 After the trial concluded, the parties filed further evidence and submissions concerning the proposed continuation of orders under s 37AF. While the submissions process was underway, the parties also continued their negotiations about the remaining evidence in dispute. After the receipt of all parties’ submissions, it was apparent there were only a limited number of documents over which there was no agreement.
252 Crown presses only an ongoing s 37AF order in relation to a report to the Commission dated September 2015. That Report was provided to the Commission by Crown during the Commission’s review of Crown’s casino licence. It included a review of Crown’s responsible gambling policy. As at November 2017, the Commission’s review was ongoing. The Report relates to a trial program conducted by Crown with respect to identification of problem gambling, and was referred to during the cross-examination of Ms Bauer during a closed court session. Crown and the applicant have otherwise reached agreement regarding appropriate redactions over three documents which are subject to the interim orders, and Crown does not press a final confidentiality order over those documents. Rather, the parties submit the documents should remain on the Court’s record in the agreed redacted form. I accept that is appropriate. Redactions within tendered documents, in circumstances where the redactions are agreed, are not a “backdoor” way of achieving the outcome of orders under s 37AF. Rather, they reflect the parties’ agreements that the redacted parts are not relevant to any material facts or issues in the proceeding. What is behind the redactions will neither be seen nor considered by the Court. Material subject to a s 37AF order is different: that is material the parties (or at least one of them) has accepted is relevant to one or more material facts or issues in the proceeding, and which at least one party asks the Court to consider in making findings of fact, or determining questions of law on established facts. The Court will see this material, as will the parties, but the public will not, contrary to the general principle of open justice. In those circumstances, I have no difficulty in accepting onto the Court’s record documents with agreed redactions, subject to the matter I raise at [272] below.
253 Crown also submits, in relation to some categories of documents, that if inspection is sought by a third party under r 2.32 of the Federal Court Rules 2011 (Cth), the Court should consider the submissions it has made in writing before deciding whether to grant such leave. I also accept that is an appropriate course, and it reflects an appropriate balance between the principles of open justice and the preservations of interests one party asserts require some protection. The documents may still be released for third party inspection: all Crown does is submit that what it says against release should be taken into account. That is an entirely fair position to adopt.
254 In relation to the Report to the Commission, Crown submits that a s 37AF order is necessary on the basis of the ground set out in s 37AG(1)(a) of the Federal Court Act: namely, that the orders are necessary to prevent prejudice to the proper administration of justice. Crown submits that this document is of peripheral relevance (if relevant at all) to the matters in dispute. Crown relied on affidavit evidence from Ms Jan Williamson, senior legal counsel for Crown, in which she deposed that the Commission’s “review process is ongoing and the public disclosure of reports by Crown to the VCGLR would impact the effectiveness of the review process”. Ms Williamson did not expand in her evidence about how or why this impact would occur, although she had earlier in her affidavit given some general evidence about the fact of what she called “client consultations” and data collected by the Crown Responsible Gaming Support Centre in relation to customers utilising the Centre’s services. She had also referred to the existence of data collected on customer Crown Rewards Club cards.
255 Crown also submits, correctly, that the Report was not referred to by the applicant in closing submissions, and that the applicant’s unconscionable conduct case did not attack the effectiveness of Crown’s current policies with respect to identification of problem gambling, which is – broadly – the subject matter of the Report. It refers to remarks I had made during the trial, to the effect that I would need to be positively satisfied of the relevance of the (voluminous) documents the parties sought to tender, and only documents which were relevant to the parties’ ultimate submissions would remain on the Court’s record, which might affect the need for s 37AF orders if some documents were, ultimately, not referred to.
256 The applicant submits that the Report has already been redacted to remove irrelevant material, and is merely evidence of the ability of Crown to conduct monitoring programs directed to problem gambling. She contends that there is no reason to suppose that disclosure of this information would cause prejudice to the licence review process being conducted by the Commission or the administration of justice, and that Crown may have other legal obligations in relation to the disclosure of the material.
257 Aristocrat presses a s 37AF order over all documents currently subject to a s 37AI interim suppression order, other than those documents which were not ultimately tendered by the applicant. The applicant objects to the proposed orders only in relation to two categories of these documents:
documents which comprise mathematical spreadsheets, calculations and formulae relating to Configurations 1 and 7 of the Dolphin Treasure EGM; and
documents which set out the results and methodology of market research conducted by Aristocrat.
258 Initially, Aristocrat also pressed a s 37AF order over Attachment 6 to the supply agreement between Aristocrat and Crown. However, Crown’s subsequent submissions, filed a month after Aristocrat and the applicant filed their submissions, indicate that the applicant agreed to the respondents’ proposed redactions to the supply agreement, and no suppression order is necessary in relation to this document.
259 The applicant submits that the first category of documents should be produced in “imaged” form rather than editable spreadsheet form. She submits that they are central to the Court’s adjudication of issues concerning the section 18 case, in light of the agreement reached that conclusions in relation to these configurations should apply to others.
260 Aristocrat submits that the mathematical spreadsheets, calculations and formulae relate to the Dolphin Treasure EGM, which is still currently supplied by Aristocrat to its customers. A competitor who gained access to this information would learn the layout of Aristocrat’s reel strips and mathematical models and would be equipped to undertake analysis of the workings of the Dolphin Treasure EGM. Although Aristocrat accepts that some of the information in the spreadsheet may already be able to be derived from published information (including the pleadings in this proceeding), it contends that that is not a proper basis to withhold a suppression order. The information is confidential and its disclosure would assist Aristocrat’s competitors, who would gain access to the information in a convenient and accessible form.
261 In relation to the market research, the applicant contends that Aristocrat has not adequately established that their disclosure would confer material advantage on trade rivals. Aristocrat has merely asserted confidentiality, and claimed that the documents are not circulated outside Aristocrat and may be used in developing Aristocrat’s marketing and sales strategy.
262 Aristocrat submits that the documents disclose information about key markets for the Aristocrat group or about gambling experiences that may be used by the Aristocrat group in developing its marketing and sales strategies in various markets. They also disclose the approach that the Aristocrat group takes in undertaking market research, which would provide the Aristocrat group’s competitors in different markets with an insight into the business of the Aristocrat group. These documents contain only a small amount of material of potential relevance to the proceeding and public access to them is not necessary to understand the issues in dispute. Aristocrat submits that its proposed suppression order does not prevent the Court from referring to the documents in its reasons for judgment, as is deemed necessary or desirable.
Ruling on the proposed s 37AF orders
263 In Motorola Solutions (No 2), Perram J said (at [8]-[9]):
It might be thought that the mere protection of commercial-in-confidence information, which is essentially what Hytera seeks in this case, fits less comfortably within the statutory words ‘necessary to prevent prejudice to the proper administration of justice’. But this Court has held in a number of cases that commercial sensitivity can be an appropriate basis for making a suppression or non-publication order: see Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 235 per Bowen CJ; Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23] per Greenwood J; Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326 at [7] per Jacobson J; Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 (‘Air New Zealand (No 3)’) at [35]; Australian Competition and Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278 (‘Origin Energy’) at [148] per Katzmann J; ASE16 v Australian Securities and Investments Commission [2016] FCA 321 at [93] per Markovic J.
There are cogent reasons for this which have variously been described in those cases, but they are generally associated with preserving the integrity of the litigious process, likely to be jeopardised if commercial competitors could benefit from court ordered production of trade secrets by parties to a suit. That said, it is important to recall that the order must be necessary to protect the administration of justice. It can readily be imagined that a carte blanche approach to applications for s 37AF orders for which commercial confidentiality is claimed as a basis, would jeopardise the interest the public has in being able to access court documents under the Federal Court Rules 2011 (Cth) or to engage meaningfully with reasons published by the Court. As I have explained at [6(6)] of these reasons above, the safeguarding of that interest as a primary objective of the administration of justice is a mandatory consideration for the Court. Particularly is that so in cases such as the present, where the Agreement, and its interpretation, may become a central plank in the ultimate resolution of the proceeding, and thus, to the intelligibility of future reasons delivered by the Court.
(Emphasis in original.)
264 Orders under s 37AF are not sought over Crown’s submissions to the Commission’s review at Tab 1058 because that submission may cause Crown some commercial detriment vis-a-vis its competitors. Rather, it is the reaction of some of Crown’s customers which is put as the main consideration. It may be accepted Crown might suffer some embarrassment, or endure some criticism, from its customers. It may be that Crown would prefer its customers did not know the subject matter of that submission. None of these matters affect the administration of justice. Although Ms Williamson deposed that the effectiveness of the Commission’s review, the Commission being a Victorian government authority, would be adversely affected, she provided no evidence as to how or why that might be so.
265 Nevertheless, I take note of the evidence that the Commission’s review is ongoing. Again, it is difficult to see how that fact alone means the availability of Crown’s submission – in a considerably redacted form – could affect the administration of justice.
266 Another factor is the marginal relevance of the document to the Court’s reasons for decision, or even to the issues before the Court (including those I have found it unnecessary to decide). The marginal relevance is best illustrated by the absence of references to the document in the applicant’s closing submissions – written and oral. Indeed, the adjective “marginal” may be too generous. Yet it remains part of the Court’s record and no party has invited the Court to remove it altogether, rather than make a s 37AF order over it (although Crown had invited the applicant to withdraw the tender of the document, to no avail).
267 On balance, I am not satisfied Crown has established that an order under s 37AF is necessary in the interests of the administration of justice over the document at Tab 1058, especially given it is a limited extract in a considerably redacted form. “Necessary” is a strong word: Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 at [30]-[31]. There will be no suppression orders over the document at Tab 1058.
268 In relation to Aristocrat’s disputed claims, I consider s 37AF orders should be made over the market research material, to describe it generally. I have looked at that material, although it has been relied on by the applicant only to a limited degree. It was not relied on by either of the respondents. The material reveals methods of market research employed by Aristocrat, ranging from how groups are selected, through what people are asked and what Aristocrat focusses on, and how it uses the research it obtains. Some of the documents are not recent (e.g. the document at Tab 820 is a 2010 document), but Aristocrat submits, and I have no reason to doubt, that these documents embody some of its current market research practices.
269 For that reason, I consider they should be subject to orders under s 37AF. I am satisfied it is in the interests of the administration of justice to do so, because the Court’s compulsory processes have required Aristocrat to produce this material so that the applicant could ask the Court to rely upon it, but it would not otherwise be in the public domain because it has the capacity to cause commercial disadvantage to Aristocrat and give a commercial advantage to its competitors. Compliance with the Court’s discovery and trial processes should not result in that potential disadvantage, at least in the circumstances of this case, and where the material is not critical or central to the Court’s reasoning process. I am satisfied the potential is real and not fanciful. If it were, then considerations of open justice in terms of the Court’s reasoning being transparent, might override commercial and competitive considerations.
270 I consider the mathematical calculations to be in a different category. I accept they may have a commercial proprietary character, and that they reveal something about how Aristocrat configures its EGMs, in circumstances where there are real choices to be made about such configuration. However, Ms Bryant’s evidence was that all the configuration and features were standard and usual components of all EGMs, and necessary to achieve RTPs within the regulated spectrum. I am not persuaded by the evidence there is anything sufficiently unique, or special about the configurations to require them to be protected by orders under s 37AF, in circumstances where the configurations were a central part of the applicant’s s 18 case, were pleaded in some detail, and were also the subject of agreed documents, some of which are reproduced in these reasons. Sufficient protection can be achieved by the form in which the configurations are to remain on the Court record, bearing in mind the record is an electronic one. As the applicant accepts, “the underlying precedents and formulae forming the digital structure of the spreadsheet should be suppressed”, so that if the form of the document is an image rather a spreadsheet, the characteristics of the document which are not relevant to the proceeding but are central to Aristocrat’s design of the EGM can be protected, while the actual information can form part of the Court’s record. Accordingly, I propose to make orders requiring a filing of a version of the document at Tabs 54 and 129-131 that is an image of the spreadsheet, but not the spreadsheet itself in electronic form.
271 Aside from the orders over which there is agreement, and the orders I consider appropriate in relation to the market research of Aristocrat there is no basis to continue the interim orders in the same form as they were made during trial. So that the position could be fully considered without undue interruption to the trial, and the role of the documents could be properly assessed, I was satisfied that interim orders should be made. However, continuing orders should be on a more restricted basis, taking account of the subsequent course of the trial and the parties’ submissions.
272 This is a proceeding in which there appears to be considerable public interest. The Court’s gallery was substantially occupied on most days of the trial. It is also a trial in which the parties have elected to place a large number of documents on the Court record, a considerable number with agreed redactions. Just as steps were taken during the trial to make the evidence accessible to the public through the use of a large screen in Court to display documents to which the parties referred, I consider the Court’s record should remain as accessible as possible, in as clear a form as possible while reducing any possibility of orders which have been made under s 37AF, or agreements between the parties about redactions, being inadvertently frustrated or breached. I propose to order the parties to file an agreed electronic version of the Court Book on a USB, which the Court’s Registry can make available for public inspection. If there are portions of the Court Book for which the parties consider a separate application for leave to inspect should be required on each occasion, these portions can be left of out of what I shall call the “generally accessible Court Book”, and leave to inspect those documents can be indicated to be required in the Court Book index, and dealt with in the usual way under the Rules. The parties will be directed to file joint proposed orders reflecting these reasons.
The expert evidence and the concurrent session
273 As I have noted, the applicant and Aristocrat each adduced opinion evidence from two expert witnesses concerning the correct understanding of, and approach to, concepts of “habituation”, “addiction”, “problem gambling” and “gambling disorder”. The experts also addressed what is known about the causes of and contributing factors to “problem gambling” and gambling disorder, in particular whether it can be said that all or any of the impugned features of EGMs are contributing factors to such conditions or behaviours. Specifically, the expert evidence is directed towards the thesis underlying the applicant’s unconscionable conduct claim: namely, that the impugned features of the Dolphin Treasure EGM contribute – in a causal sense – to the habituation of gamblers to playing EGMs, or the addiction of gamblers to playing EGMs.
274 After their individual reports were produced, the experts were asked to confer and produce a joint report, responding to nine questions agreed between the parties. Those questions were:
To what extent is the definition of “habituated” at para 37 of the applicant’s concise statement consistent with the meaning of “gambling disorder” in the DSM-5? I note the definition of “habituated” given in the concise statement is: “By ‘habituated’ is meant that a person is drawn to play the EGM regularly (at least once a week) and unable to resist the temptation to do so”.
To what extent is the definition of “addicted” at para 37 of the applicant’s concise statement consistent with the meaning of “gambling disorder” in the DSM-5? I note the definition of “addicted” given in the concise statement is: “By ‘addicted’ is meant that a person plays the EGM regularly and will spend his or her resources in doing so even when it is beyond that person’s means to play so regularly.”
To what extent is it possible to say that classical or operant conditioning or the dopamine effect play a role in the development of “habituation”, “addiction” or “gambling disorder” in respect of an EGM?
To what extent is it possible to form conclusions as to the likelihood of a particular person becoming “habituated” or “addicted” or developing a “gambling disorder” in respect of an EGM based solely on the criteria for “gambling disorder” in the DSM-5 or the person’s score on the Problem Gambling Severity Index?
To what extent is it possible to identify what is or are the causes of a particular person becoming “habituated” or “addicted” or developing a “gambling disorder” in respect of an EGM?
To what extent is it possible to identify any design features of an EGM as a cause of a particular person becoming “habituated” or “addicted” or developing a “gambling disorder” in respect of an EGM?
To what extent is it possible to say that one or more of the features specified in para 26B(e) of the further amended statement of claim (the Oversized Reel Feature, the Starved Reel Feature, the Return to Player Information, the lights and sounds emitted by the Dolphin Treasure EGM, and Losses Appearing as Wins) are (or are likely to be) a cause (or the cause) of any person becoming “habituated” or “addicted” or developing a “gambling disorder” in respect of the Dolphin Treasure EGM?
To what extent does a person who is “habituated” or “addicted” or is suffering from a “gambling disorder”:
perform a voluntary act or acts when putting herself in a position to play, and playing, an EGM?
maintain an ability to make judgements as to her own best interests when putting herself in a position to play, and playing, an EGM?
275 It is fair to say that little, if any, agreement was reached. A joint report was produced, which essentially revealed a joint opinion by Professors Ladouceur and Nower, and a contrary joint opinion by Dr Deighton and Professor Yücel. The joint report nevertheless had some utility, in that it synthesised and summarised the competing expert views in one document.
My approach to the expert evidence
276 There was no real challenge to the qualifications, expertise and experience of either of Aristocrat’s two expert witnesses. I accept they are each well-qualified to express the opinions they do.
277 While not challenging his qualifications, the respondents did challenge the ability of Dr Deighton to express some of the views he did, on the basis that he had no factual or experiential basis for those opinions. Aristocrat also appeared to challenge Dr Deighton’s general academic expertise in the area of causal factors for gambling disorders or “problem gambling”, submitting that he has only one academic publication in the area of gambling studies, and the extent of his clinical experience is unclear. Professor Yücel’s evidence became the subject of a serious challenge, in circumstances I explain below.
278 The two sets of experts come from different perspectives on the matters in issue in this proceeding. The applicant’s experts were prepared to identify features of EGMs as “contributing factors” to both the development of problem gambling behaviour and of gambling disorder as a clinically diagnosed disorder in accordance with DSM-5 (that is, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders), whereas Aristocrat’s experts insisted there was no evidence to support such a conclusion and said it is not possible to identify the specific causes of a particular individual becoming habituated or addicted to gambling or developing a gambling disorder. Their basic position was that the aetiology of gambling disorder is poorly understood. The applicant’s experts appeared, at least at some times in their evidence, to concede this. However, in substance the applicant’s experts were prepared to express opinions that took what research there was as support for much more extensive causal propositions than Aristocrat’s experts were prepared to agree the research supported.
279 There were differences between the experts on terminology, but I consider it was tolerably clear by the end of their evidence that all the experts agreed, when talking about people who gamble, that certain distinctions needed to be made. There are people who gamble who show no maladaptive habits and remain in control of their gambling, and in that sense gamble “responsibly”. There are then people who might be described as having “problems” with their gambling which is at a “sub-clinical” level (to use Professor Nower’s phrase), but nevertheless they exhibit one or more of the nine symptoms listed in the diagnostic criteria in DSM-5. Finally, there are people who meet the diagnostic criteria of DSM-5 and can be said to have, or be likely to be diagnosed as having, a gambling disorder. It seems to be fundamental to the opinion of all experts that one must assess the likely or possible reactions of people to playing EGMs by taking into account which category they are likely to fall into.
280 The two sets of experts diverged, it seems to me, primarily on two matters.
281 First, whether the features of EGMs can be said, as a matter of scientific opinion, to be in the category of contributing factors to gambling disorder, or to “problem gambling” (assuming for the moment that is a legitimate category of people to identify).
282 Second, the role that a person’s own volition and choice play in the decision to gamble, and how to gamble, including the volition and choice still exercised even by those who have been diagnosed with gambling disorder.
283 These two matters raise large and complex questions. As I explain in these reasons, because of the conclusions I have reached on the applicant’s allegations I do not consider it is necessary, and therefore it is also not appropriate, for the Court to make any definitive findings on either of these matters. Nevertheless, there were several aspects of the expert evidence which do feature in the findings I make in these reasons, and therefore it is important that I explain why I have preferred the opinions of Aristocrat’s experts over those called by the applicant.
284 As to my impressions of Aristocrat’s expert witnesses, I found Professor Nower’s evidence to be clearer at times than that of Professor Ladouceur, whose answers were sometimes more difficult to follow. I also found Professor Ladouceur appeared sometimes to be keen to reinforce a broader aspect of his thesis, especially about the level of control that he considers all people, including those with gambling disorders, have over their behaviour and over their tendency or inclination to gamble. At times, he sought to draw his answers back to this aspect of his thesis in a way which was not responsive to the question he was being asked. That made his evidence less helpful at some points.
285 In contrast, I found Professor Nower’s evidence always to be clear, and to make appropriate distinctions and qualifications where necessary.
286 Difficulties were exposed with the opinions of both Dr Deighton and Professor Yücel during their cross-examinations.
287 In cross-examination, Dr Deighton was somewhat cautious: pausing, thinking, sometimes appearing to hesitate and frequently repeating the cross-examiner’s question before answering. While a degree of caution in answering questions may indeed be a commendable quality in an expert witness and indicate she or he is being appropriately careful in her or his evidence, on this occasion my impression was Dr Deighton was somewhat tentative in trying to piece together the hypotheses he was advancing. During his cross-examination it was apparent he was less familiar with the features of the Dolphin Treasure EGM than his report might have suggested, including with how multi-line wins occurred. He also appeared unfamiliar with his own report, and the terms used in it, in a way that suggested a level of unfamiliarity with the source material it contained. He gave confused, or unclear, answers to questions directed at his analysis of the relevance of classical and operant conditioning on the relationship between features of the Dolphin Treasure EGM and gambling disorder. This tentativeness and lack of clarity might well be explained by his lack of experience in research on gambling, as Aristocrat submits. Overall he did not offer a sufficiently persuasive basis for his hypothesis that certain features of EGMs could be described as contributing factors to the development of a gambling addiction or gambling disorder. In circumstances where his answers were tentative, difficult to follow and contested by Professors Ladouceur and Nower, I prefer the evidence of those experts to Dr Deighton’s evidence. Where his opinions are consistent with Aristocrat’s experts, they may be accepted, but not when they extend beyond this point.
Professor Yücel
288 By closing submissions, the applicant did not ask the Court to rely on anything in Professor Yücel’s report that was not adopted by one of the other experts. This rather extraordinary position arose because of the exposure of the extent to which Professor Yücel had used and adopted the work of others without attribution, and employed his own previous work in a way which concealed the fact that very little of his expert report was his original work. Some of the work he used without attribution included the work of Professor Nower. Other sources which he copied without attribution included Wikipedia (putting to one side the appropriateness of an expert witness resorting to Wikipedia at all). He also lifted statements expressed in other journal articles about other kinds of addictions and replaced words so as to make the statements read as if they related to gambling addiction when, in fact, they did not. He did this without attribution of the original source. When confronted in cross-examination with examples of where he had lifted passages from other sources without attribution, he dissembled by responding that he did so “partially”, when in fact it is clear, and I find, he took all the words from the unattributed source and then added other words, or inserted a reference to gambling when the original source was not referring to gambling. That is, when his copying was exposed, he did not admit the failing and apologise: he sought to minimise and avoid what was obvious.
289 Despite what had been exposed about his report, Professor Yücel told the Court he was “very comfortable” with the way he had prepared this report. That statement was either dishonest (perhaps due to embarrassment), or displayed a total lack of insight by Professor Yücel into his responsibilities as an independent expert. Whichever one it is, the Court can have no confidence in the opinions of a person who makes such a statement.
290 When pressed (including by me) on this answer, Professor Yücel’s explanation as to why he felt “very comfortable” was revealing. He told the Court, more than once, that the reason he did not provide proper citations and attributions to others’ work was because the report is “not an academic publication… So I didn’t deem it necessary.” He continued:
I don’t need to paraphrase it because it’s not going to go out there into the academic world and – and be compared to what’s – a publication out there already.
291 He told the Court that he saw his role as an expert witness as presenting opinions in an “information-sharing educational forum rather than trying to republish in any copyright sense in an academic forum.” In re-examination, he summarised his position thus:
…my ethical spirit of what I’ve tried to do here is really to provide more of an education, information-type orientation, as opposed to try and publish or republish something in an academic forum, claiming any ownership over any of the ideas or models or data that was out there. So I think, in that regard, I have given myself some freedom of taking things where I felt it was very clearly described and putting them in because I felt that would actually be helpful to your Honour, rather than try to reword them and mess with them. I didn’t really think that was a problem, and what remains, I saw as fair use of some replication, and the final thing is I stand by everything I’ve said. I feel like I have been absolutely true to what was asked of me.
292 For Professor Yücel to see the provision of expert evidence to the Court as providing an “education” in an “information-sharing educational forum” that requires less rigour than publication in an “academic forum” discloses at best a failure to understand and appreciate the role and responsibilities of an expert witness as set out in the Code of Conduct Professor Yücel deposed to having read and understood, and at worst a misplaced arrogance about the importance of discussion and debate within the academy as compared to discussion and debate between qualified experts for the purposes of assisting and informing the exercise of judicial power.
293 The purpose of expert evidence is not to “educate” the Court on matters, it is to provide a specialist opinion or information which is outside the experience and knowledge of a judge or jury: R v Turner [1975] QB 834 at 841 (Lawton LJ), approved in Murphy v The Queen [1989] HCA 28; 167 CLR 94 at 111 (Mason CJ and Toohey J) and 130 (Dawson J). The purpose of admitting an expert opinion on a material question of fact (or more than one material question of fact) is to assist the Court in forming its own, ultimate opinion and finding on that matter. An expert’s opinion is not a substitution for a court’s judgment: see R v J-LJ [2000] SCC 51; 2 SCR 600 at [56], where Binnie J, on behalf of the Court, said:
The purpose of expert evidence is thus to assist the trier of fact by providing special knowledge that the ordinary person would not know. Its purpose is not to substitute the expert for the trier of fact. What is asked of the trier of fact is an act of informed judgment, not an act of faith.
294 While it will often be the case in a trial by judge alone that an expert witness assists a judge in understanding concepts or propositions which form part of the expert’s opinion, or are part of the basis for that opinion, there is no general educative function being performed by the expert. And it is certainly not the case that, even in giving the kind of assistance which may be a legitimate part of her or his role, it is permissible or appropriate for an expert to adopt a less than exacting and thorough approach to the evidence she or he gives to the Court than might be taken between members of the academy.
295 Aside from the copying and failure to attribute the sources he used, Professor Yücel’s evidence generally lacked reliability in more substantive ways. Some examples will suffice to explain why I have reached this conclusion. It will be recalled that Question 5 of the joint report, also addressed in Professor Yücel’s report, concerned the extent to which it is possible to identify what is or are the causes of a particular person becoming “habituated” or “addicted” or developing a “gambling disorder” in respect of an EGM. This was one of the key topics for the expert evidence. Professor Yücel’s opinion in his report was:
There is solid evidence that specific design features of modern EGMs form the basis of several cognitive errors and have the potential to reinforce incorrect beliefs that are widely held by problem gamblers, such as the gambler’s fallacy, illusion of control and near-misses [1-7]. As evidenced by these empirical studies, the reason that EGMs reinforce these incorrect beliefs is that personal choice plays a significant role in reinforcement, and EGMs design includes numerous aspects of personal choice. For instance, EGMs give the player the option to assert control over the number of lines (i.e., multi-line betting) and bet size, which leads to the false belief that there is somehow control over the outcome (e.g., the occurrence of wins), hence maintains the gambling behaviour [8]. Yet most casino games are entirely random.
(Emphasis in original.)
296 He was cross-examined about his assertion, repeated in his oral evidence, that there was “solid evidence” for this answer. This answer was contained in the opinion section of his report which Professor Yücel continued to insist were his own opinions and (by implication) not affected by the copying and lack of attribution identified in other parts of his report. He was taken through each of the footnotes in his report which he asserted provided the “solid evidence”. Some, such as footnote 1, were references to large documents – here the Productivity Commission Report on Gambling, a two-volume, 1100 page report, without a particular page number. Professor Yücel could not give a page number, saying he had written this “four months ago”. When counsel for Aristocrat took him to a section of the Productivity Commission Report, which counsel contended was “the only section of the report that deals with these types of issues”, Professor Yücel conceded he could not remember whether he had looked at this section of the report.
297 Another footnote (footnote 3) referred to a document that stated the empirical position was “speculative”. This document also discussed the features of the EGM there involved which revealed how different it was from a Dolphin Treasure machine, and yet Professor Yücel did not back away from asserting the findings (without the qualifications made in the original report itself) could be applied to the Dolphin Treasure EGM. Most of the sources Professor Yücel cited in support of his reference to “solid evidence” related to studies involving an EGM in the United States colloquially called a “fruit machine”, which Professor Yücel accepted was less “complex” compared to the Dolphin Treasure EGM. He also appeared to accept, but discount, the fact that the purpose of some of these studies was to assist those counselling problem gamblers rather than to identify objectively any causal relationship between EGM features and the developing of a gambling addiction. He had, it seemed, ignored and failed to acknowledge, statements in these studies to the effect that further work was needed before any conclusions could be drawn. Almost all of these studies concerned fruit machines – simpler EGMs as compared to the Dolphin Treasure EGM, with only three reels – a fact that apparently did not trouble Professor Yücel in using these studies to extrapolate much broader propositions.
298 Professor Yücel deliberately distanced himself from the opinion of the authors of one of the more recent studies (2015) into the possible effects of the losses disguised as wins feature, where the authors themselves stated that this research was in its nascence. This is despite Professor Yücel having himself cited this study for his assertion that there was “solid evidence” concerning specific design features. Without any apparent basis other than his own conviction, Professor Yücel asserted to the Court that the research is “a bit stronger than in nascence”. This is a good example of his preparedness to make assertions without any basis in research or fact, and to continue to do so despite the flaws and failings in the preparation of his report having been exposed. In another instance, he also disagreed with Professor Blaszczynski, an expert whom he accepted was “eminent” in the field of gambling studies, on a range of topics in a recent (2016) literature review conducted by Professor Jonathan Parke, Dr Adrian Parke and Professor Alex Blaszczynski. Again, Professor Yücel disagreed with the authors that research into losses disguised as wins was at a “nascent stage of research”, without any evidence to back up his assertion.
299 Professor Yücel insisted his expertise is in addiction, and now that gambling is categorised as an addiction, he has expertise to apply findings about addictive behaviours (e.g. drugs and alcohol), to gambling, taking these “structural characteristics” into account, but not being limited by them. However, his answers were at such a generalised level that they gave me no confidence he had any substantial basis in his own experience, or in his knowledge or familiarity with other research, about what he said. His evidence did little more than make assertions, without any material basis for them. The examples I have given at [295]-[298] illustrate that he lacked familiarity even with the sources he used in his report.
300 In summary, I found his answers tended to be dissembling when he was confronted with a difficulty in what he said, and at other times his answers were cavalier. There was no rigour at all applied to his oral evidence, and when his primary sources were exposed as providing little if any support for his opinions, he was unable to make appropriate concessions, or any concessions. Instead he sought to adhere to his opinion in circumstances where there was no objective justification for him to do so.
301 Finally, there was a level of discrepancy between what Professor Yücel said in the joint session and what he maintained during cross-examination. In cross-examination by counsel for Aristocrat, he was asked whether a number of identified propositions were right or wrong. Unbeknown to him at the time he gave his answers, the propositions were taken from his evidence in joint session. In dealing with these propositions during cross-examination, Professor Yücel qualified answers he had given during the joint session without, of course, being aware of what he was doing because the source of the propositions being put to him was not revealed until the end of the cross-examination. Although I do not accept that all of Professor Yücel’s answers during this part of his cross-examination were inconsistent with what he said during the joint session, again what was apparent was that his opinions seemed somewhat elastic, and he was not able to formulate his opinions in a way which was clear and consistent. Rather, he tended to be somewhat opportunistic in how he expressed himself. That is not an approach which encourages a Court to rely on what an expert says.
302 Overwhelmingly, Professor Yücel’s attitude under cross-examination when these failings were exposed lacked any insight into the seriousness of his conduct, or to the important responsibilities attaching to the giving of expert evidence in a judicial setting. To the contrary, Professor Yücel sought to diminish the importance of the role of an expert witness, in the ways I have already described. By the end of his cross-examination, Professor Yücel had revealed himself as a person without understanding of the role of an expert witness, and as a person willing to use and copy the work of others without attribution, apparently to save himself time and effort, including the effort of reflecting about the content of his opinions and expressing them in his own voice.
303 As my reasoning has proceeded, the expert evidence in this case has confined relevance to the conclusion I have reached. To the extent it is necessary to do so, in making findings on the applicant’s claims, I have preferred the evidence of Professor Nower, supplemented by the evidence of Professor Ladouceur where necessary. I did not find Dr Deighton’s opinion to be grounded in sufficient understanding, experience and factual basis to be of assistance. Professor Yücel’s opinions are irretrievably tainted by his flawed and irresponsible approach and I have disregarded them entirely.
Resolution
304 This proceeding raises a number of important issues. The fact that I have found the applicant has not proven her claim should not be seen to diminish the importance of the issues she raises. First, it is clear from the expert evidence, and the studies referred to in that expert evidence, that research into the possible relationship between the design and features of EGMs and the development of addiction to gambling, or the development of problematic attitudes and behaviour to gambling, is a new field, where some researchers at least have identified justifications for further work exploring this relationship.
305 Second, the intersection between the protections afforded by consumer law, and legislative and other policy choices made to allow, but regulate, the provision of goods or services in a context where some members of the Australian community ultimately suffer harm (smoking and alcohol being two other examples), also gives rise to factual and legal issues of real complexity.
306 In a case that raises issues of general importance and complexity such as these, I consider the appropriate course is for the Court not to determine any more of those issues than are necessary to dispose of the allegations as pleaded, on the view the Court takes of those allegations. That approach best reflects the adversarial rather than inquisitorial context in which judicial power is exercised in Australian law. Matters of general importance, especially with a public interest element and the prospect of considered positions existing on either side of those issues, should await judicial determination in circumstances where it is necessary for the Court to determine them, rather than simply expressing an opinion that ultimately has no bearing on the reasoning leading to the orders the Court has made.
307 For clarity, I have set out the matters which I consider fall into this category at [539]-[553] below.
A general observation about my approach to the parties’ arguments
308 I consider both parties’ arguments at times attributed too much to those who gamble on the Dolphin Treasure EGM (or, for that matter, on any similar EGM). The applicant tended to attribute a sophisticated level of analysis to the gambler, about the meaning and operation of the features of the EGM, that either found no foundation in the evidence or (in relation to the lay witnesses) was not consistent with the evidence. The respondents’ arguments tended to attribute to those who gamble on these machines a level of mathematical understanding, and a level of inquiry into the information available about the working of the machines, that I do not consider realistic nor made out on the evidence.
309 Having considered the evidence, both the specific evidence of the lay witnesses, and the more general evidence set out in various publications in evidence and in the expert reports (aside from Professor Yücel’s), in my opinion, that evidence reveals that those members of the public who gamble on EGMs, while not unquestioning about how the machines work, have a different focus. They gamble on these machines because they secure some level of pleasure or entertainment from them, and/or alternatively because gambling on the machines satisfies one or more personal or emotional needs, vulnerabilities or tendencies. Objectively, many must realise the odds are against them winning more than they bet, or even regaining any portion of the money they bet. On the evidence, if there is one message which is conveyed by the publicly available material to those who gamble on EGMs, it is that the machine will always come out ahead. I am satisfied on the evidence that most individuals who gamble on EGMs understand this reality at some level.
310 Yet, human nature being what it is, people have a capacity to deny, downplay or ignore objective reality. They do so, as I have noted, where to behave in a way which acknowledges that reality would avoid the pleasure, entertainment and satisfaction of personal and emotional needs, tendencies or vulnerabilities which they secure from gambling on the machines. People do not gamble on EGMs because it is rational to do so. They gamble for a range of other reasons, some harmless to them, some not. The applicant’s allegations must be assessed in this context. The evidence suggests that when people sit down at an EGM, their focus is on how to play the machine, what wins they might secure from it, the personal and emotional reactions they experience from gambling on it and the experiences of those around them. Not everyone gambles alone; for some, it is a social activity. For others, on the evidence, it is clearly a solitary pastime, but that does not mean those who gamble alone pay no attention to what is going on around them in the casino environment. I do not accept that the hypothetical, reasonable gambler is especially concerned to understand the placement of symbols, the workings of the reels, the probability calculations or the details of the text and numbers available to her or him on the player information display, or in the brochures. Although the occasional individual may be so disposed, I am not prepared to attribute to the hypothetical construct required by the law of a person gambling on a Dolphin Treasure EGM any attributes of rational analysis about how probability operates as a concept in the configuration of EGMs; nor any intention to analyse or consider in detail how and when particular symbols appear on a screen. Both parties’ approaches have aspects of unreality.
A general finding on the applicant’s claims
311 The applicant’s case, under both s 18, and ss 20 and 21, as to the effects of three identified features of the Dolphin Treasure EGM, the meaning conveyed by the RTP statement, the role of the two features employed in configuring the Dolphin Treasure EGM and the role of “losses disguised as wins” relies principally on inferences. In large part, it relies on the Court drawing its own inferences from viewing videos of how the Dolphin Treasure EGM operates and presents, and from what was observed on the view.
312 There is a marked absence of evidence from individuals who have gambled on the Dolphin Treasure EGM, or other EGMs with the same characteristics, about the effects of the impugned features. There is no survey evidence going to these matters. There are no studies relied on, which are directly relevant to the Dolphin Treasure EGM, disclosing how gamblers perceive or react to the impugned features, presentation and devices of the Dolphin Treasure EGM, or any other equivalent EGM.
313 The applicant is correct that as a matter of law, such evidence is not required. However, the applicant still bears the usual onus of proof. How she chooses to discharge it forms one of the forensic decisions to be made.
314 The respondents are correct to submit that the absence of such evidence significantly increases the difficulty of the applicant discharging her burden of proof, and especially so where the very gravamen of her case is founded on “impressions” created by the impugned features (the first two limbs of the s 18 case; and then – as well as these matters – on how gamblers react to “losses disguised as wins” and to the “celebratory feedback” the EGM is alleged to give).
315 Aristocrat made the following submission in closing submissions:
While the determination of whether conduct is misleading or deceptive is ultimately a matter for the Court, the absence of evidence from any person said to have been misled or deceived (and a resort to speculation as to their mental processes) may tell against a finding of misleading or deceptive conduct.
In WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274, Gummow J noted (at 280) that:
[T]here are some cases, and this case is one in my view, where submissions to the Court have diminished force unless they are enlivened by evidence as to the circumstances in which the allegedly misleading or deceptive conduct is communicated to those said to be prejudiced by it and the relevant habits and attitudes of such persons. These materials then become part of the “surrounding circumstances”.
Tamberlin J made similar comments in Pacific Publications Pty Ltd v Next Publishing Pty Ltd (2005) 222 ALR 127 at [92], a case (like the present) in which it was alleged that a combination of features somehow engendered a misleading impression in the minds of two groups of consumers:
In this case, the misrepresentation is broadly said to arise from the resemblance between “Total Girl” and “Girl Power” so as to create an impression in the minds of the two aforementioned groups that there is an association between the persons responsible for the publication or production of the two magazines. In this case, no evidence has been given as to the patterns of behaviour of tweens or their parents in considering the appearance or contents of the magazines either at the point of sale or when the magazines are distributed amongst the readers. There is also no evidence as to the impression formed by these two groups of the provenance, endorsement or formulation of the two magazines. Although assertions and speculative remarks have been made, there is an important evidentiary gap in Pacific’s case. There is no reliable evidence before me as to the reactions of such a reader or purchaser in relation to the misrepresentations alleged.
This reasoning applies with particular force in the present case as the misconceptions alleged to have been formed rely (at least in part) on speculated inferences based on players’ alleged understandings about old-fashioned mechanical slot machines (about which no evidence is given by the Applicant’s lay witnesses).
316 I accept that submission. It has particular force, as I have noted, because of the nature of the allegations made by the applicant.
317 In Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73 at [45] Allsop CJ said, as part of his Honour’s articulation of the general principles applying to s 18 of the ACL:
Evidence that someone was actually misled or deceived may be given weight. The presence or absence of such evidence is relevant to an evaluation of all the circumstances relating to the impugned conduct. Where the conduct and representations are to the public generally and concern a body of simple direct advertising, the absence of individuals saying they were misled may not be of great significance. There was no such evidence here. The ACCC was criticised for that. That criticism is unfounded. The objective assessment of advertising using ordinary English words in an attempt to persuade can be undertaken without the lengthening of a trial by the bringing of witnesses of indeterminate numbers. Language, especially advertising, seeking to raise intuitive senses and associations, can have its ambiguities and subtleties. The task of evaluating the objective character and meaning of the language in the minds of reasonable members of the public is not necessarily one that will be assisted in any cost-effective manner by calling members of the public. The question is one for the court: Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.
318 His Honour’s statement is made in the common context of a s 18 case: namely a representation made by particular language. In the present proceeding, this is the case for the Risk representation. However it is not the case for the first two limbs of the applicant’s s 18 claim. In those limbs, the applicant expressly relies on impressions formed by the gambling public from what appears on a screen, rather than text. In my opinion, her burden of proof on these two limbs is harder to discharge in the absence of any direct evidence from those who gamble, especially (one might think) those who gamble regularly or habitually, about the impression they formed from the features on the screen on which the applicant relies.
319 To submit that the Court is placed in as good a position as the gambler by looking at video recordings of the screen, undertaken in a laboratory, and which the Court can view in isolation as many times as it likes, is to replace the actual context of the representation with an artificial one.
320 Further, to suggest that the Court is placed in as good a position as the gambler because of the view that was undertaken again invites the Court to draw inferences about impressions in circumstances that are not commensurate with the circumstances in which members of the public gamble on a Dolphin Treasure EGM. Many other activities were being undertaken at the time of the view – explanations about aspects of the machine and the venue, questions being asked and answered, observations being made of the casino environment – that would not occupy the attention of the hypothetical gambler when she or he was using an EGM. The correlation, although the best that could be achieved, was materially imperfect.
321 Taken together, those two factors illustrate why the burden of proof about an allegation resting on impressions of the user of an EGM may need to be discharged differently from the burden of proof in an allegation relying on a representation arising from text and language. I consider the absence of any direct evidence from gamblers about the effects of the impugned features of the Dolphin Treasure EGM makes it considerably harder to be persuaded that the alleged representations are in fact made, and have the character of being misleading or deceptive.
322 On occasion in her closing submissions, the applicant did rely on some of the lay evidence. For example, in relation to what a gambler might perceive from the presence on each reel of certain symbols (and whether a gambler could perceive the reels were differently constituted with various symbols), the applicant referred to her own evidence:
[T]he applicant, in her affidavit at [12] (CB tab 23), gave evidence that:
I believed that when one or two symbols appeared, it meant that the chance of more of the same symbols appearing was likely.
323 I have used this reference in the closing submissions because, contrary to the point the applicant sought to make by this reference, it is a good example of the insufficiency of proof of the allegations the applicant makes. Ms Guy was not cross-examined. In her affidavit she does not explain what she means by this sentence. The meaning of the sentence is equivocal. The evidence does not refer to the appearance of symbols on the same reel. It could refer to symbols appearing anywhere on the five reel matrix on the screen. It could mean Ms Guy thought that when she saw a particular symbol appearing more than once, anywhere on the matrix on the screen, she thought that symbol might be more likely to appear again. That evidence says nothing about how she viewed the symbols on each reel. It says nothing about whether she thought seeing a symbol more often made it more likely she would get a winning line. This piece of evidence is not probative of any aspect of the allegations made in the pleadings, and it is certainly not probative of the allegations about a gambler’s “impressions” derived from the fact that in any given reel, each symbol only appears once on the screen at any given time.
324 In contrast, the third limb of the s 18 case, concerning the text of the player information display describing the RTP configuration of the machine is akin to many s 18 cases, relying on a representation said to arise from statements in text presented to consumers. For this aspect of the applicant’s argument, the absence of evidence from people who have gambled on the Dolphin Treasure EGM has less probative significance.
The section 18 claim
What I accept from the applicant’s case
325 I accept that there are features of the Dolphin Treasure EGM which are consciously designed to mimic or invoke the way an old fashioned mechanical slot machine used to work. The whole impression of the machine having reels, of the reels spinning, stopping from left to right consecutively, and the ticking sound as they stop, are all features which are intended to retain the sense or impression of old fashioned slot machines.
326 This was accepted by Ms Bryant during cross-examination:
I suggest to you that a number of things have been done to evoke the connection with old-fashioned poker machines, for example, the ticking sound – I think you called it a clicking sound, but - - -?---“Reel clink” is what we call it, yes.
Thank you. The “reel clink” – that is a conscious design choice to make the video screen evoke or resemble a poker machine – a mechanical poker machine, I suggest?---Well, in – I guess in the whole context of the fact that the video representation of a real game has evolved from a stepper game, then yes, that reel clink sound is meant to sound like a reel coming to rest.
And the bounce as the reels come to rest consecutively from left to right – that’s - - -?---Yes, that’s – yes.
…
So there’s a similarity between the current format and the old mechanical – or electromechanical machines, isn’t there?---There is – yes. We started with mechanical and then we got – the electronically-driven steppers were derived from this and then the video spinning reel was derived from the electronic stepper. So it’s just the evolution of spinning wheel games.
The five reels, when they spin, also appear to obey the law of physics as if they had been set in actual physical motion; do you agree with that?---Yes.
And the ticking or the reel clink sound has regularity that seems to relate to a constant rate of spin for each reel; do you agree with that?---Well, it’s a – it’s meant to synchronise with the spin of the reel. Yes.
…
So that clicking noise – is that meant to be just shortly before the reel comes to stop?---It’s meant to be when the reel – the – like, the stopping position when it – when the – the stop sound – the reel stop sound. We actually call it a reel stop sound.
Okay. Thank you. And there’s about three such sounds just before the symbol comes to rest and that’s repeated five times from left to right?---That one is the same sound played for each of the five reels as they stop.
Yes. Thank you. That also is intended to evoke a mechanical machine?---It’s derived from – it’s the – again, the evolution of the spinning reel game. It’s derived from the electronic version of the stepper which was derived from the mechanical reels.
327 I also accept that each of the Dolphin Treasure EGMs situated on the floor at Crown Casino has the features the applicant alleges it does, namely:
(1) The video screen of the Dolphin Treasure EGM displays an image of five animated reels, each reel comprising symbols, with each symbol being about equal size, spinning at even pace, and coming to rest consecutively, from left to right of the screen and at approximately even intervals. This is what the applicant calls the “Even Reel Image”. Aristocrat does not dispute the existence of this feature, however Crown contends that this is not a feature, rather it is an alleged impression, and “there is no reason to assume that the animated reels are of any particular size relative to each other”. I find it is appropriate to describe the images on the video screen as a “feature”, and that this feature is as the applicant describes.
(2) The Dolphin Treasure EGM emits a “ticking” sound as each of the five reels comes to a rest. I accept this sound resembles the sound made by the spinning reels of an old-fashioned slot machine, and is played for approximately the same amount of time before each of the five reels comes to rest. This is what the applicant calls the “Spinning Reel Sound”. This is not disputed by the respondents.
(3) Once each of the five reels comes to rest, a matrix of symbols five reels wide by three symbols high is visible, and on any given reel the symbols are distributed so that no two symbols of the same kind appear on any given “reel”. The third feature is what the applicant calls the “Dispersed Symbols Image”. Neither respondent disputes this is how the screen in fact appears.
328 Further, I accept that, on each of the Dolphin Treasure EGMs situated on the floor at Crown Casino:
(1) one of the five “reels” has significantly more stopping points and symbols than the others; and
(2) the symbols are not evenly distributed across the “reels” and some symbols appear many more times on one “reel” than on another.
The class issue
329 As I noted above at [160], the applicant contends the class for the purposes of the s 18 claim is “adult members of the public who are entitled to enter a licensed gaming venue and lawfully play an EGM, inclusive of the entire spectrum of such people from people who are playing for the first time, regular users, and very frequent users (including problem gamblers)”.
330 In Pacific Publications Pty Ltd v Next Publishing Pty Ltd [2005] FCA 625; 222 ALR 127 at [27] Tamberlin J referred to a passage from the judgment of Franki J in Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 40 FLR 165 at 176, which I consider a helpful description of the correct approach to the hypothetical gambler (and which I do not understand to have been intended to be pejorative in any way):
“…whether in an objective sense the conduct of the appellant was such as to be misleading or deceptive when viewed in the light of the type of person who is likely to be exposed to that conduct. Broadly speaking it is fair to say that the question is to be tested by the effect on a person, not particularly intelligent or well-informed, but perhaps of somewhat less than average intelligence and background knowledge although the test is not the effect on a person who is, for example, quite unusually stupid.”
331 Further, at [28], Tamberlin J referred to a passage from the reasons for judgment of Sheldon and Sheppard JJ in CRW Pty Limited v Sneddon (1972) AR (NSW) 17 at 28, in relation to the Consumer Protection Act 1969 (NSW), which I also find to be a helpful exposition, although dealing with a rather different context:
“An advertisement published in a newspaper is not selective as to its readers. The bread is cast on very wide waters. The advertiser must be assumed to know that the readers will include the shrewd and the ingenuous, the educated and the uneducated and the experienced and the inexperienced in commercial transactions. He is not entitled to assume that the reader will be able to supply for himself or … herself omitted facts or to resolve ambiguities. An advertisement may be misleading even though it fails to deceive more wary readers.”
332 The point from both these authorities about the breadth of the class, and the inability of the Court to assume particular levels of sophistication and education, likewise the likelihood that not all gamblers will be misled (or confused), are relevant matters to bear in mind in considering the nature of the hypothetical gambler on a Dolphin Treasure EGM for the purposes of the applicant’s s 18 claim.
333 In its written closing submissions, Crown helpfully set out as an Annexure the findings of fact it contended the Court should make. This document also provided a basis for the applicant’s Senior Counsel in closing submissions to indicate which of the propositions of fact in that Annexure were contested, and which were not.
334 I propose to adopt those parts of Annexure A to Crown’s submissions that deal with the attributes of the applicant’s alleged class, and to work through my findings about the attributes of the class by reference to those propositions. Where I agree with the factual proposition put by Crown, I have used the language used by Crown.
335 An ordinary and reasonable member of the applicant’s alleged class (or, what I have called, the hypothetical gambler) will know and appreciate:
(a) that the symbols (or computer graphics) and the way in which they appear on the screen are computer generated. I consider that in current times, it is notorious that machines such as EGMs operate through computer software and hardware. People going to gamble on such machines do not expect them to operate as old fashioned slot machines (or intermediate stepper machines) actually operated;
(b) that the computer program determines where any given symbol comes to rest in the matrix. The applicant disputed that the ordinary and reasonable gambler would understand the mathematical implications of randomness, and I agree with that submission. I accept, however, that the ordinary and reasonable gambler is likely to have a limited appreciation that some kind of randomness is involved in how the symbols come to rest. I do not consider the ordinary and reasonable gambler would turn her or his mind to how the computer software generates the symbols, except to appreciate that there is no predictable or predetermined outcome: namely, that chance is at work;
(c) that one cannot predict outcomes or infer any outcomes from the nature of the images, because the result of any game is generated by the computer;
(d) that some symbols appear more regularly on the reels than other symbols, as indicated from the odds on the pay table and the player information display, principally the former because the pay table uses the symbols as the basis for the information it conveys. The ordinary and reasonable gambler would understand, as a matter of common sense, that when five sunrises result in a win of 9,000 credits, compared to two turtles resulting in a win of 4 credits, that the turtle symbol is likely to appear more often on the reels.
336 Subject to the observations I make at [338] and [339] below, an ordinary and reasonable gambler:
(a) may access, read and understand at least most of the rules of the Dolphin Treasure game. I find it is likely at some stage in a person’s experience of using an EGM to gamble that she or he is likely to have looked through at least some of the rules. That is because most people will be concerned to understand how they can secure wins, and what leads to them losing their money. The game rules are an obvious source of this information;
(b) may access, read and understand the player information display. I consider, consistently with the way the applicant puts her case in relation to the Risk representation, that there will be a subset of ordinary and reasonable gamblers who will elect to access the player information display;
(c) understands from the player information display that the odds are in favour of the house, and range from the very long odds for the top five winning combinations down to the odds for the lowest five winning combinations which still favour the house. I do not accept Crown’s submission that the ordinary and reasonable gambler will understand this to a level of detail which would justify finding, for example, that she or he understands the odds are heavily “weighted” in favour of the house;
(d) will be able to identify their net win or loss position following any single or multi-line bet, because that information is displayed and subject to literacy levels, a gambler will be able to understand this information as she or he continues to gamble. The applicant does not accept that this will invariably be the case, however I consider that at least subject to literacy levels, a gambler would be able to identify this information and, because she or he is likely to be interested in how much money she or he is making or losing, is likely to look at this information;
(e) subject to my observations at [338] and [339] below, has available to them the information made available to Crown patrons, including Victorian Government brochures such as “Playing the Pokies Know the Facts”, “Play Your Way” and “Keep track of your time and Money” as well as Crown brochures such as “Responsible Gaming Support Centre”, “Self-Exclusion”, “Chaplaincy Support Service” and the “Crown Responsible Gambling Code of Conduct”. The applicant does not accept that the ordinary and reasonable gambler would necessarily know that those brochures are available, and does not accept their attention is drawn to them. She does not accept that an ordinary and reasonable gambler would take and read these brochures. I reject most of that submission. I accept the brochures may not be taken, but I consider there may be a substantial number of patrons who pick them up and read some or all of their contents, and replace them. Some may keep the brochures for a period of time. I find the brochures are, nevertheless, available in quite prominent and visible locations throughout Crown Casino, and are easy to access if a person wishes to do so. Subject to literacy issues, they are also readily understandable in terms of their content;
(f) can obtain assistance by pressing a button on the Dolphin Treasure EGM.
337 For the reasons set out elsewhere in this judgment, I do not accept Crown’s submission that the ordinary and reasonable gambler will understand the concept of a theoretical RTP, at least not as it is expressed on the player information display. Nor am I prepared to find an ordinary and reasonable gambler will otherwise have any independent knowledge or understanding of the theoretical RTP from other sources, before accessing the player information display.
338 There is an important qualification on these findings. I raised it with the parties in final submissions, but no party really grappled with the issue my question raised. It was apparent on the view, and I consider it is a matter of which I can take judicial notice, that the diversity of the Australian community is represented at a place like Crown Casino. Relevantly, that includes the ethnic and racial diversity of the Australian community. It is also a matter of which I can take judicial notice, although it may also be buried somewhere in the evidence, that the Casino is frequented by international tourists and travellers, many of whom will be from a diverse ethnic and racial background. It seems to me that the parties’ approach may involve a false premise: namely, that all members of the class can read and understand the English language as their first language, or at a similar level of proficiency. If members of the class cannot do so, then they cannot read and understand the rules, nor the player information display, nor any available brochures or other information. Perhaps some have used EGMs in other countries where similar information is provided, and such information is presented in a language they read and understand, perhaps not. There is no evidence on this matter.
339 Further, there is a significant proportion of the Australian community who have little or no literacy skills in English, even if it is their first language. They also will not be assisted by written information, although they will be able to understand the symbols. Perhaps the answer for this group is that they will not be misled at all, even on the applicant’s case. I doubt that is so, but again, no party sought to address the Court on this.
340 Most of the authorities to which the parties referred also involve these unstated premises. Many also implicitly assume a fairly high level of formal education in the “ordinary and reasonable” consumer. It is a larger question, and not one that needs to be answered in this proceeding given the findings I have made and the lack of engagement by the parties with the matter, but at some stage courts may need to start readjusting the approach taken to the hypothetical “ordinary and reasonable consumer”, so that it does not involve an inherent bias towards individuals with a relatively high level of formal education and literacy who have English as their first, or at least completely proficient, language.
341 Finally, there are a number of other relevant attributes to the ordinary and reasonable gambler, which are not set out in these propositions, and to which the applicant also did not expressly advert. Indeed, the applicant’s submissions about the class issue are highly general.
342 I consider those other attributes are:
(1) The person is someone who has chosen to come into Crown Casino, being a venue dedicated to gambling.
(2) The person will be one who enjoys risking, has become accustomed to risking, or is willing to risk, money in circumstances where there is a likelihood all or some of that money will be lost.
(3) The person will have a range of personal, psychological or emotional needs or characteristics which are likely to affect her or his inclination to gamble.
343 There was some considerable debate, explored in the expert evidence, about the appropriate level of voluntariness and conscious choice to attribute to members of the class, although most of this debate occurred in the context of the unconscionability claims. Some of the lay evidence, as I have recounted, suggested some witnesses felt under a compulsion to go to a venue where she or he could gamble. Nevertheless, as Professors Ladouceur and Nower made clear, and I accept, there remains a personal choice to enter a gambling venue. I have no difficulty in concluding this is an attribute of class members in the s 18 claim in particular, given the breadth of the description of the class articulated by the applicant.
344 The second attribute is one I consider to be inherent, to a greater or lesser extent, in the choice to gamble. The third attribute recognises what the evidence plainly establishes: namely that a wide range of factors affect the human inclination to gamble. For instance, Professor Nower stated in her report, in relation to “problem gamblers”:
…a complex interplay of varying degrees of bio-psycho-social risk and protective factors, as outlined below, lead some individuals to develop gambling problems or other maladaptive behaviors, while other players adopt coping strategies or social support mechanisms that insulate them from addiction altogether.…
…a sizeable proportion of problem gamblers, including those in a study I co-authored (Nower & Blaszczynski, 2010), report that their major motivation for gambling is not to win money; rather, for many problem gamblers, excitement, escape and other emotional and subjective motivations prove more predictive of problem gambling than winning.
345 Throughout these reasons on the s 18 claim, when I refer to the class, I describe the person as “the hypothetical gambler”.
How the view fits in with the constructed hypothetical gambler
346 The applicant expressly invited the Court to undertake a view which involved operating and using the Dolphin Treasure EGM. The respondents also sought to have the Court actually use the machine to identify the features they wished to emphasise. All parties sought to have the Court draw on the experience of “playing” the EGM, limited as it was. All parties also sought to have the Court draw on its observations about the Casino environment, and the facilities available: examples are the location and facilities at the counselling centre, the placement of brochures and information throughout the Casino, the noise levels, the placement and location of the EGMs.
347 There is no doubt the view was of some assistance to the Court. However, it took place over a relatively short period of time, and in a necessarily controlled and somewhat artificial sequence. It by no means replicates the experience of the hypothetical gambler in using the Dolphin Treasure EGMs on the floor of Crown. There may be many circumstances where a view forms a critical part of the evidence because it enhances the Court’s ability to assess evidence that is otherwise static. For example in Pledge v Roads and Traffic Authority [2004] HCA 13; 205 ALR 56 at [49], Callinan and Heydon JJ said (McHugh ACJ, Kirby and Hayne JJ agreeing):
Even before the enactment of the Evidence Act, appeals courts customarily accorded significance to a demonstration or view at first instance. It was not accorded the weight that it deserved here. It is also relevant to the first error that has been identified. It must have supplied to the trial judge the valuable third dimension that the photographs necessarily lacked…
348 An analogy in the present proceeding might be between videos of the Dolphin Treasure EGM operating, and what the Court observed when the EGM was operating during the view.
349 The critical difference however, is that core parts of the applicant’s case concern impressions formed and effects felt by the hypothetical gambler. Again, without the benefit of direct evidence from others who have gambled and “experienced” the impugned features, the Court is asked through the view to assign the impressions and effects experienced by the judge to the hypothetical gambler. There is a high degree of subjectivity and variation in this task, that is not present when a court is asked to assess language or text, or to make findings about a place or the location of an isolated incident, such as (as was the case in Pledge v Roads and Traffic Authority) the location of a motor vehicle accident. There is the added difficulty in this instance where the Court is being asked to consider whether certain “impressions” are formed by the hypothetical gambler, in circumstances where the parties have necessarily prompted the Court on what these impressions might be. That is why I consider some caution needs to be applied to the impressions formed, and effects experienced, during the view. It is virtually impossible to decide, on the evidence, whether they are representative of, or commensurate with, the hypothetical gambler.
The Equal Reel Size Representation
350 I find that the representation alleged is not made by the visual presentation of the Dolphin Treasure EGM. It is not made whether one considers one or all of the “features” relied upon by the applicant. It will be recalled those three features are the “Even Reel Image”, the “Spinning Reel Sound” and the “Dispersed Symbol Image”: see [148]-[150] above.
Even Reel Image
351 I have accepted the applicant is correct in her description of what she calls the “Even Reel Image”. The five animated reels do spin at an even pace, so far as the eye of the hypothetical gambler is concerned, although of course they are not in fact “spinning” at all, and they are not reels. An electronic image is created to suggest this is what occurs. What the hypothetical gambler sees is, indeed, five animated reels with a range of symbols of approximately equal size, spinning at an even pace, and coming to rest consecutively, from left to right of the screen and at approximately even intervals. The applicant accepts the fact that one reel has more stopping points than the others is not visible to the gambler. The evidence also revealed that, although it looks like each reel spins through all the symbols on that reel, in fact the way the random number generator operates is that once a stopping point is identified, all that appears on the screen are a few of the symbols either side of the symbol where the stopping point will be. In other words, the “reel” does not spin through all the symbols on that reel each time a line is played. Again, that feature is not visible to the gambler.
352 However, accepting that this is what the hypothetical gambler sees or perceives does not lead me to draw the inference for which the applicant contends. There is no evidence from which it could be inferred that these perceptions would lead a gambler to turn his or her mind at all to how many “stopping points” exist on each reel, and how this might affect the probabilities of a winning line occurring. There is no lay evidence about such a perception. There is no account of such perceptions in any of the secondary source material which has been drawn to the Court’s attention. No studies have been conducted, at least so far as the evidence reveals, which indicate such a perception exists. It is not a natural or expected consequence of the features I have accepted in [327] above that a gambler would turn her or his mind to the number of stopping points on each reel, in order to suppose or assume there is some evenness. I do not see why a gambler would form such an impression. A gambler’s focus, as I describe below, would in my opinion be much narrower.
Spinning Reel Sound
353 I accept the submissions of Aristocrat that, in the real life situation on the floor of the Casino in which these machines are used, the hypothetical gambler would have difficulty hearing the ticking sounds, as opposed to the video in evidence where the machine was operated in a laboratory environment. However, the hypothetical gambler would, I find, be aware to some extent there was a ticking sound that simulated the way an old fashioned machine used to work. It is an integral feature of the machine and designed to be noticed.
354 What I am not persuaded about, on the evidence, is that the ticking sounds would induce the hypothetical gambler to believe that the reels were of even “size”, in terms of the number of stopping points. While the ticking might well induce the hypothetical gambler to believe that there was some regularity or pattern in the movement of the symbols, there is no basis in the evidence to infer the belief would extend to there being an even, or more or less even, number of stopping points on each reel. For example, it seems more likely the hypothetical gambler would believe the ticking indicated the symbols were moving, and also indicated when they stopped moving. I see no basis in the evidence to infer the gambler’s belief would go beyond an impression of this kind. I accept Aristocrat’s submissions that the lay evidence as a whole does not establish that any of the lay witnesses had an impression about reel size of the kind the applicant alleges is conveyed. Rather some lay witnesses (for example, Ms Bardsley at [19]) deposed that they did not think critically about what they were doing at all. Aristocrat is correct to submit that if the lay evidence establishes anything it establishes that the hypothetical gambler is unlikely to evaluate or interrogate the operation of the machine at all: rather, she or he just plays it.
Dispersed Symbols Image
355 This feature seems to me to be more relevant to the second representation than this one, but nevertheless I adopt the findings I make below in respect of this representation. I do not see how this feature – no symbol appearing more than once on a given reel in the matrix on the screen – could lead the hypothetical gambler to any particular belief about how many stopping points were on each reel. If a gambler were focussing on the symbols at all, and looking for different ones, it would be with an eye to anticipating which symbols she or he hopes may land in a winning line. No basis in the evidence has been provided for an inference that such a gambler would be looking at the distribution of the symbols for the purposes of understanding her or his odds of securing a winning line.
356 As Crown points out in its final written submissions, the pay table on the Dolphin Treasure does inform gamblers about the range of odds attaching to each symbol used in the matrix. The odds inform gamblers about which symbols are scarcer than others. I do not accept the applicant’s submission that this feature, taken separately or with the other two features, conveys the pleaded representation.
The Equal Symbol Distribution Representation
357 I find that the representation alleged is not made by the visual presentation of the Dolphin Treasure EGM. It is not made whether one considers one or all of the “features” relied upon by the applicant.
Even Reel Image
358 I adopt the findings I have made above.
Spinning Reel Sound
359 I adopt the findings I have made above. I see no basis in the evidence to infer that the ticking sounds emitted would lead the hypothetical gambler to believe that the 13 symbols were evenly dispersed on each reel. The ticking may promote a sense of pattern and regularity, but no more. I find its principal purpose, and the principal effect it has, is to act as a “mimic” of old fashioned slot machines, which, it would seem, increases the enjoyment of those who use the machine.
Dispersed Symbols Image
360 I do not accept that the “Dispersed Symbols Image” contributes to an “impression of a dispersion and even distribution of the symbols on each reel”. I am not satisfied on the evidence that the hypothetical gambler would be conscious of the fact that no symbol appears more than once. If expressly asked about it, perhaps it is something some individuals might be able to identify. None of the lay witnesses did so, despite each gambling (especially on EGMs) so much that it became problematic in their lives. I consider it of some importance that if the very people singled out in the applicant’s case, including the applicant herself, as the most vulnerable, but coincidentally also the most experienced at playing EGMs, did not identify the even dispersal of symbols as something they noticed, and which made a particular impression on them, it is difficult to see how an inference could properly be drawn that the hypothetical gambler would secure such an impression.
361 It is not an impression I gained during the view. It must be recalled the applicant’s case is that the hypothetical gambler includes those who are gambling occasionally, and even for the first time.
362 The alleged impression is also counterintuitive to the object of gambling on the Dolphin Treasure. The object (whatever the emotional or psychological reaction sought) is to secure alignments of particular symbols so as to gain a winning line. The gambler’s focus, if it is on anything on the screen, is on watching whether the symbols are lining up in a winning combination. That narrower focus, which I infer is the more likely one, would not easily allow for a wider impression involving evaluating whether symbols are evenly dispersed.
363 Although Ms Bryant did give some evidence that she could get a sense of the frequency of symbols appearing on a reel, as they appeared on the screen, if she does have this ability it is certainly not typical of the hypothetical gambler. It is more likely to have been borne of her long experience working with these machines, and her particular focus on how they are configured. No party relied on Ms Bryant’s evidence on this issue.
A submission relevant to both representations
364 Aristocrat also submits there was no probative basis for the court to make any finding on what the hypothetical gambler perceives, sees and hears during a session on the Dolphin Treasure EGM. That submission has force, but is not quite correct: there is the video evidence of what appears on the screen, and there is the evidence from the view. This evidence provides some probative basis for the Court to draw inferences. Aristocrat is correct however that there is no direct evidence from any person who has gambled on the Dolphin Treasure EGM about what she or he perceives, sees and hears, in relation to the pleaded features. Nor was the Court directed to any account of such perceptions in the secondary source material, comprising journal articles and studies. The absence of such evidence means it is even harder to draw the inference for which the applicant contends.
The function of the “oversize” reel feature and the “starved reel” feature
365 Although I have found the applicant has not proven that either of the first two alleged representations are made, it is necessary to address briefly the consequences the applicant contends attaches to the two features which the applicant alleges the gambler is not informed of. That is because it appears implicit in the applicant’s case that there is something untoward, or improper, in how these features affect the gambling experience of a person using the Dolphin Treasure EGM. I do not accept that implication.
366 The respondents accept the gambler is not informed of these two features, which form part of the deliberate design of the Dolphin Treasure EGM.
367 The applicant gave the following example of the effect of the “Starved Reel Feature” in her closing written submissions:
The player might expect from the information provided on the PID that there would be, say, less Turtles than Nines overall, but there is no reason to expect an uneven distribution of Turtles across the reels. However, in actual fact, with Configuration 1 there is only a one-third chance of a Turtle coming to rest (anywhere in the matrix, or on any given payline), on reel 2, compared to reel 3. To take more examples from Configuration 1, there is only a one-half chance of either Sea Horse or Star Fish coming to rest on reel 3, compared to reels 1, 2 and 4 (and a roughly one-third chance compared to reel 5).
368 Ms Bryant’s evidence was that the number of times particular symbols appear on a reel was one of the mechanisms used by designers of an EGM “game” to achieve the required RTP range. In this sense, her evidence suggested the placement of symbols, and their frequency, does affect the probabilities of a gambler obtaining particular winning lines.
369 The applicant produced, through Associate Professor Harrigan (whose evidence was eventually the subject of some agreement between the parties that removed the need for him to be cross-examined), some “counterfactual” probability calculations for the “starved reel” feature. In the applicant’s closing submissions, she contends:
If, instead of having the distributions of each kind of symbol across the virtual reels that apply to the actual configurations, each kind of symbol was re-distributed across the reels more evenly, as set out in the counterfactual configurations in the Actual and Counterfactual Configurations table filed and served on 5 September 2017, then the probabilities of obtaining winning 5-of-a-kind outcomes would be increased as set out in that table for all symbols except for Sunrise and Treasure Chest, and (save for configurations 9 and 10) Ace.
…
In summary, the counterfactual configurations where symbols are more evenly distributed across the reels have materially higher winnings when the counterfactual wins are calculated by reference to the actual paytable. This demonstrates that impression created by the game of even symbol distribution is highly material. In effect, a message that the odds are far better than they truly are is being conveyed.
(Emphasis in original.)
370 The table below is one of the counterfactual configurations referred to in the above extract. It shows the probability of achieving five matching symbols for each symbol, if the symbols were as close to evenly distributed as possible.
|
CONFIGURATION 1 - COUNTERFACTUAL | |||||||
|
Counterfactual - 679405 | |||||||
|
Reels |
|||||||
|
1 |
2 |
3 |
4 |
5 |
TOTAL |
Probability of achieving 5 matching symbols | |
|
Symbol |
Number of symbols per reel |
||||||
|
9 |
2 |
2 |
3 |
2 |
4 |
13 |
2.6936E-06 |
|
10 |
3 |
3 |
2 |
3 |
4 |
15 |
6.06061E-06 |
|
Jack |
4 |
3 |
3 |
3 |
5 |
18 |
1.51515E-05 |
|
Queen |
3 |
3 |
3 |
3 |
5 |
17 |
1.13636E-05 |
|
King |
3 |
3 |
3 |
3 |
3 |
15 |
6.81818E-06 |
|
Ace |
2 |
2 |
2 |
3 |
4 |
13 |
2.6936E-06 |
|
Octopus |
2 |
2 |
3 |
2 |
4 |
13 |
2.6936E-06 |
|
Fish School |
2 |
3 |
3 |
3 |
4 |
15 |
6.06061E-06 |
|
Starfish |
2 |
2 |
2 |
2 |
3 |
11 |
1.3468E-06 |
|
Treasure Chest |
1 |
1 |
1 |
1 |
1 |
5 |
2.80584E-08 |
|
Turtle |
3 |
2 |
2 |
2 |
3 |
12 |
2.0202E-06 |
|
Seahorse |
2 |
3 |
2 |
2 |
3 |
12 |
2.0202E-06 |
|
Sunrise |
1 |
1 |
1 |
1 |
1 |
5 |
2.80584E-08 |
|
TOTAL |
30 |
30 |
30 |
30 |
44 |
||
371 To assist in understanding the remoteness of the outcomes occurring, I have converted the scientific notations of the probability of achieving five matching symbols to textual expressions of these probabilities. The scientific notation e-05 is the same as 10-5, and represents 1 in 100,000. So for instance, the probability of achieving five matching Jacks (which has the highest probability of all of the symbols) is 1.5 in 100,000. That is, the probability it will occur is 1 in every 66,666 spins. The probability of achieving five sunrises and five treasure chests is the most remote of all the symbols: it will occur 2.8 times for every 100 million spins, or 1 in 35,714,286 spins.
372 I reproduce the counterfactual table below, in a simplified version. This table shows the probabilities identified in the above table, but converted to a textual format.
|
Probability of achieving 5 matching symbols |
Probability converted into 1 in X format | |
|
Symbol |
||
|
9 |
2.6936E-06 |
1 in 371,250 spins |
|
10 |
6.06061E-06 |
1 in 165,000 spins |
|
Jack |
1.51515E-05 |
1 in 66,666 spins |
|
Queen |
1.13636E-05 |
1 in 88,000 spins |
|
King |
6.81818E-06 |
1 in 146,667 spins |
|
Ace |
2.6936E-06 |
1 in 371,250 spins |
|
Octopus |
2.6936E-06 |
1 in 371,250 spins |
|
Fish School |
6.06061E-06 |
1 in 165,000 spins |
|
Starfish |
1.3468E-06 |
1 in 742,501 spins |
|
Treasure Chest |
2.80584E-08 |
1 in 35,714,286 spins |
|
Turtle |
2.0202E-06 |
1 in 495,000 spins |
|
Seahorse |
2.0202E-06 |
1 in 495,000 spins |
|
Sunrise |
2.80584E-08 |
1 in 35,714,286 spins |
373 As the applicant submits, the probability of winning based on this counterfactual is higher for all symbols except the sunrise and treasure chest, when compared against the actual configuration 1. The probability of winning based on the actual configuration 1 is summarised in the table below.
|
Probability of achieving 5 matching symbols |
Probability converted into 1 in X format | |
|
Symbol |
||
|
9 |
1.79574E-06 |
1 in 556,873 spins |
|
10 |
2.6936E-06 |
1 in 371,250 spins |
|
Jack |
6.28507E-06 |
1 in 159,107 spins |
|
Queen |
3.14254E-06 |
1 in 318,214 spins |
|
King |
3.367E-06 |
1 in 297,000 spins |
|
Ace |
2.6936E-06 |
1 in 371,250 spins |
|
Octopus |
1.79574E-06 |
1 in 556,873 spins |
|
Fish School |
3.367E-06 |
1 in 297,000 spins |
|
Starfish |
8.97868E-07 |
1 in 1,113749 spins |
|
Treasure Chest |
2.80584E-08 |
1 in 35,714,286 spins |
|
Turtle |
1.3468E-06 |
1 in 742,500 spins |
|
Seahorse |
1.12233E-06 |
1 in 891,004 spins |
|
Sunrise |
2.80584E-08 |
1 in 35,714,286 spins |
374 The below table compares the probabilities of winning based on the actual and counterfactual configurations.
|
Probabilities of counterfactual configuration |
Probabilities of actual configuration | |
|
Symbol |
||
|
9 |
1 in 371,250 spins |
1 in 556,873 spins |
|
10 |
1 in 165,000 spins |
1 in 371,250 spins |
|
Jack |
1 in 66,666 spins |
1 in 159,107 spins |
|
Queen |
1 in 88,000 spins |
1 in 318,214 spins |
|
King |
1 in 146,667 spins |
1 in 297,000 spins |
|
Ace |
1 in 371,250 spins |
1 in 371,250 spins |
|
Octopus |
1 in 371,250 spins |
1 in 556,873 spins |
|
Fish School |
1 in 165,000 spins |
1 in 297,000 spins |
|
Starfish |
1 in 742,501 spins |
1 in 1,113749 spins |
|
Treasure Chest |
1 in 35,714,286 spins |
1 in 35,714,286 spins |
|
Turtle |
1 in 495,000 spins |
1 in 742,500 spins |
|
Seahorse |
1 in 495,000 spins |
1 in 891,004 spins |
|
Sunrise |
1 in 35,714,286 spins |
1 in 35,714,286 spins |
375 As to the “oversized reel” feature, the applicant gave the following example in her closing submissions:
121. In all the actual configurations:
(a) there is a Sunrise symbol (sometimes referred to as Sunset), which acts as a “wild” and also is the most high-paying 5-of-a-kind symbol (9000 credits for a one credit bet on a payline in which all 5 Sunrises appear);
(b) there is a Treasure Chest symbol, which is the scatter symbol, and which pays 400 credits for a one credit bet, wherever in the matrix all 5 Treasure Chests appear;
(c) there is only one of each of Sunrise and Treasure Chest on each virtual reel.
122. The materiality of the effect of having an oversized fifth reel is most simply demonstrated with respect to Sunrise, although similar conclusions apply to Treasure Chest.
123. If, instead of having an oversized fifth reel, the size of the fifth reel was reduced to 30 stopping positions, the probability of a 5-of-a-kind win for Sunrise would be increased from the present probability in the middle column to the counterfactual probability in the third column {see Harrington’s First Report at page 1(a), (b), (c) and (e), responding to Question 1, and Ms Bryant’s affidavit at [247]}, as follows (please see over the page):
|
Configurations |
Actual probability 5-of-a-kind |
Counterfactual probability of 5-of-a-kind |
|
1, 2, 3, 7 |
2.806 x 10-8 |
4.115 x 10-8 |
|
4, 5, 6, 8 |
2.54562 x 10-8 |
3.73357 x 10-8 |
|
9, 10 |
2.41127 x 10-8 |
3.6169 x 10-8 |
124. In the case of configurations 1, 2, 3 and 7, the counterfactual is, for example, 1.47 times more likely to result 5 Sunrises (Harrigan First Report, answer to Question 2(e); Bryant Affidavit at [247]) – that is, a win of that kind is about half as likely again.
125. The same calculation for Treasure Chest involves any of the three stopping positions of the reels that come to rest in the matrix at the end of a play, and so the equivalent calculation for configurations 1, 2, 3 and 7 (which have reel configurations of 30/30/30/30/44) is:
(a) Factual: (3/30)4 x (3/44) = 0.0000068;
(b) Counterfactual: (3/30)5 = 0.00001
376 The below table converts the applicant’s table at [123] of her closing submissions into textual expression.
|
Configurations |
Actual probability 5-of-a-kind |
Counterfactual probability of 5-of-a-kind |
|
1, 2, 3, 7 |
1 in 35,637,919 spins |
1 in 24,301,337 spins |
|
4, 5, 6, 8 |
1 in 39,283161 spins |
1 in 26,784,016 spins |
|
9, 10 |
1 in 41,471,921 spins |
1 in 27,647,986 spins |
377 Once some agreement had been reached on the details of the configurations of the machines and the calculations applied, the respondents did not dispute the proposition that each of these features affected the odds of certain winning lines occurring. I did not understand either respondent to dispute the accuracy of the applicant’s table, although of course they disputed its relevance to any contravention of s 18, or steps in reasoning towards any contravention.
378 The remoteness of the probabilities presents another hurdle to the success of the applicant’s claim. Even if, contrary to my findings above, I had concluded either or both of the Equal Reel Size and Equal Symbol Distribution representations were made, I would not have been persuaded either representation led the hypothetical gambler into an error that was material in the sense of there being a sufficient causal link between the representation made and any erroneous belief or assumption of the ordinary and reasonable member of the class: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [39]; nor in the sense of being a representation which led the hypothetical gambler to labour, or be expected to labour, under some “erroneous assumption” which is not fanciful or speculative: National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90 at [18].
379 The difference between a probability of a winning line (for example) being 1 in 27.6 million spins and being 1 in 41.5 million spins is insufficiently material in both of senses to which the authorities refer. It elides the difficulty for the applicant to contend (even if mathematically true) that the odds are twice as great in the counterfactual configuration as in the actual configuration.
380 The more critical points are first, that the probabilities remain exceedingly low, so low that there is no practical difference between one probability and the other for an individual gambler using a Dolphin Treasure EGM in any given session. Neither representation would cause the hypothetical gambler to form any erroneous belief about the probability that she or he will secure a winning line in the session she or he was playing on the Dolphin Treasure EGM. And second, the hypothetical gambler would not, by either the Equal Reel Size or Equal Symbol Distribution representations, make any erroneous assumption about the probabilities of securing a winning line in the session she or he was playing, other than something which was entirely speculative or vague. That is because, as Crown submits, the applicant relies on two representations which are “impressions”, to which no precision can attach. Correctly, the applicant does not contend the hypothetical gambler has any particular mathematical attributes; and also correctly acknowledges (in the words of her Senior Counsel during final submissions) that in order to establish either of the two representations are false “you would have to be a mathematician with access to the reel configuration and symbol distribution information”. All the hypothetical gambler could do would be to speculate that the probabilities might be different to what they in fact are, without being able to put any specifics around the two sets of probabilities. Further, to engage in this speculation, the hypothetical gambler would need a relatively sophisticated understanding of the role that reel “size” and configuration played in the calculation of the probabilities of securing winning lines. There is no basis to attribute such a level of understanding to the hypothetical gambler.
381 Another way to put this difficulty for the applicant is to look at the question through the prism of what the hypothetical gambler would expect, when using a Dolphin Treasure EGM, about the probabilities of securing winning lines, if she or he took notice of the Even Reel Image and the Dispersed Symbol Image.
382 Again, I emphasise there is no evidence about what people who gamble on these machines do expect: the case relies on the Court drawing inferences from the way the machine presents, and from the experience of the view.
383 Putting that difficulty to one side, and assuming the Court should search for what inferences could be drawn about the expectations of a hypothetical gambler, I am not persuaded the correct inference would be that the hypothetical gambler has a sufficient understanding of probability theory to appreciate the differences in probabilities thrown up by the use of the two features, in contrast with the absence of such features and a more even spread of stopping points on reels and symbols on each reel; or in the absence of statements informing the gambler about the use of these features. As I have noted above, the differences in probabilities still locate a person’s chances of a winning line upwards of 1 in several tens of millions. I do not consider the hypothetical gambler assesses her or his chances of getting particular winning lines by reference to these kinds of remote probabilities. The hypothetical gambler may well be influenced by the odds set out in the player information display, and by the pay table. Beyond this, there is simply no basis in the evidence to infer that the hypothetical gambler is at all concerned to calculate in detail the probabilities of securing particular winning lines.
384 Aristocrat made the following submission:
In oral opening, counsel for the Applicant disclaimed any suggestion that there are “human calculators sitting in front of these machines”, but nevertheless maintained that players experience an exaggerated impression of their odds. This position is internally inconsistent. Players could only gain such an impression by engaging in precisely the sort of “human calculation” disavowed by the Applicant. There is no evidence that this occurs.
(Footnote omitted.)
385 That submission is to the same effect as the one made by Crown, and I accept it.
386 Finally, as Crown also submits, the hypothetical gambler is, if she or he chooses to be so, armed through the player information display with the information about the actual probabilities that are the product of the reel configuration as implemented by the software on any particular Dolphin Treasure EGM. If the hypothetical gambler makes any assumptions, I am satisfied it would be assumptions based on this information. In other words, if the hypothetical gambler can be attributed with sufficient interest in probability to search for information, in my opinion, this is the information she or he would search for, and find, and which is accurate. That information tells the hypothetical gambler about the actual probability outcomes of the EGM and, if anything, that is what a gambler who was sufficiently interested would rely upon.
The applicant’s reliance on “near misses”
387 In closing submissions, the applicant made reference to the concept of “near misses”. She did so in the context of a submission about the effect of the starved reel feature, contending that the uneven distribution of symbols will contribute to the occurrence of more “near misses” when a gambler uses the EGM. She submits:
114. The player is not told what frequency each symbol appears on each reel, nor the reel’s size, so cannot know the probability of a given symbol on a given reel coming to rest on a payline. Aristocrat in its opening says that the ignorance of the player about reel size points up a fatal defect in our case, because, as it is put in [40], the “yardstick” is unknown, and the player could not form in incorrect impression as to her prospects of success that is different to actual prospects because the “denominator which determines those probabilities is concededly unknown”. But this is a highly formalistic submission. The player can see multiple spinning reels, some of which are quite heavily weighted with a given symbol and one of which is starved of it. Over a long period of play the gambler is likely to see the symbol coming to rest on a recurring basis on the reels that are weighted with the symbol, but is most unlikely to plot and record that this impression has been gained only from certain reels. Unbeknownst to the player, it is very unlikely that the symbol will come to rest on the starved reel, and relatively more likely to do so on the other reels, without delivering a winning outcome. For example, in configurations 1 and 7, symbol 9 is far less likely to appear on reel 3 than the other reels, Jack is far less likely to appear on reel 2 than the other reels, Queen is far less likely to appear on either of reels 2 or 4 than the other three reels, King is far less likely to appear on reel 1 than the other reels, Octopus, Fish School, Starfish and Seahorse are each far less likely to appear on reel 3 than the other reels, and turtle is far less likely to appear on reel 2 than the other reels. This will give tend to give an impression of near misses, stemming from the prevalence of those symbols on the other reels. Near misses are recorded in the Schlotter report executive summary, to the knowledge of Aristocrat, as being understood to include “Matching symbols appearing on the pay line without the right number of symbols (e.g. getting 3 with the 4th symbol missing)”: CB tab 1034 page 36754. There is lay evidence of the impact on players of near misses. In her affidavit at CB tab 25, Ms Libby Mitchell at [23] gave evidence that she believes that:
… what attracted me to playing the games were the lights and sounds and near misses or ‘almost wins’. I would often hear somebody say ‘Oh how bad was that … just one off’ for example. I used to think the same myself. I noticed that winning symbols would flash past after hovering then suddenly disappear by the end of a spin. I was told that every spin was totally random so I accepted it.
(Footnotes omitted).
388 As the respondents point out, the applicant’s pleaded case does not rely on the concept of near misses. Until this submission, there was no allegation that any of the features identified by the applicant contributed to a gambler experiencing an increased number of near misses, and this encouraging the gambler to continue betting on the EGM.
389 In the terms it is made, the applicant’s submissions about near misses cannot be accepted, even if one puts aside the fact that this does appear to be a new way of identifying the harm or effect of the starved reel feature. While the applicant contends it is “far less likely” that some symbols will appear on reels where they are, numerically, present in a smaller number, as is apparent from what I set out at [374], many of the probabilities involved are expressed in minute, or remote, terms. To simply submit that a symbol is “far less likely” to appear takes the applicant’s argument no further, even given the counterfactual calculations submitted by the applicant. The calculations do not assist the applicant because the probabilities are so low that the difference in probabilities between one outcome (where the reel is not “starved”) and another (where it is) remain so remote it is inconceivable the hypothetical gambler would be forming any beliefs based on the number of times a symbol does or does not appear.
390 Further, to move from these propositions to the proposition that near misses are “more likely” to occur on an EGM with a “starved reel” is also such a general statement, unsupported by any underlying calculations, as to not assist the applicant’s case. There is simply no evidence about whether, if at all, an individual gambler would experience a higher number of near misses because of the starved reel feature.
391 However, the more basic difficulty with the concept of near misses being expressly relied on in the applicant’s closing submissions is the introduction of a new argument far too late in the trial. When asked during his oral closing submissions to identify how near misses “tie[d] into the section 18 case”, Senior Counsel for the applicant stated that the concept is “more concerned with the unconscionability case”. As Aristocrat submits, the proposition that any of the features relied upon contributes to the sense of “near misses” and encourages individuals to continue gambling (or however else the argument might be put) is not alleged in the applicant’s unconscionability case. Nor is it alleged as part of the s 18 case. No amendment application was made. The role of the identified features in contributing, or not contributing, to the sense of near misses is not an issue raised in this application and I do not consider it further.
The Risk Representation
Nature and function of the RTP
392 I make the following findings, based principally on the evidence of Ms Bryant, about the nature and function of the RTP.
393 It will be recalled that the National Standard requires each EGM to display the RTP, as that term is defined in the Standard.
394 It appears the insertion of information about the RTP was a regulatory reform introduced by the Victorian Government, in response to a recommendation of the Productivity Commission. It was introduced along with a suite of measures which now find their place in the Gambling Act and Regulations, designed to provide better information to gamblers and to encourage people to gamble “responsibly”.
395 Aristocrat referred the Court to p 40 of the Productivity Commission’s report, “Australia’s Gambling Industries”, dated November 1999, which said:
The industry has emphasised that consumers are buying ‘time’ or entertainment when they gamble. However, unlike many other consumption items, there is little basis for consumers to know the expected ‘price’ of their purchase. Many people have little understanding of the expected return on a lotto ticket, for example. And minimum payout ratios for gaming machines convey little information about likely spending rates.
• While there are complexities involved, the Commission sees considerable scope for providing more meaningful information about the effective ‘price’ of playing poker machines and lotteries, including the likelihood of receiving high paying winning combinations. For example, how many poker machine players would appreciate that the chances of getting say ‘five rhinos’ would be only one in ten million — even less than winning the lottery (box 10).
• Apart from other considerations, the absence of adequate price information in this area provides some justification for the statutory minimum payout ratios.
The prime objective of better information is simply to empower consumers, not to deal with problem gambling. However, better information about the odds and average costs of gambling might help reduce the false perceptions that sometimes underlie problem gambling.
396 It then recommended (at p 41):
Box 10 Communicating the price of gambling
Displaying the mathematical odds of different outcomes on a gaming machine may be informative for many people, but may do little for those consumers who find odds hard to interpret. But there are more evocative ways of representing the odds that may be more understandable. For example, in the case of Black Rhinos (a popular gaming machine), consumers could be told that (as confirmed by the manufacturer), if they bet one line per button push, in order to have just a 50 per cent chance of getting 5 rhinos:
• it would take them 6.7 million button presses; or
• at ordinary rates of playing, it would take them 188 years of playing or 392 days of absolutely continuous play (24 hours a day); or
• it would cost them nearly $330 000.
(Of course, this is an extreme example of a general point. Clearly, this machine also pays out many smaller prizes with much higher probabilities.)
The best measure of the effective price of playing poker machines is the expected loss (one minus the return rate). Together with information on the odds of different payouts, this could be shown in real time on the poker machine screen. Machines already have versatile displays which provide graphics and information to players. They are effectively computers with an inbuilt colour monitor. Incorporating such further information would involve no radical re-design of the machines (and therefore should not pose high compliance burdens).
Indeed, AGMMA (sub. D257, p. 7) suggested a display card format that could be usefully employed — reproduced in chapter 16 (box 16.4).
However, the Commission considers that trials with consumers would need to be conducted to assess:
• the exact form in which information should be provided;
• the usefulness of complementary information pamphlets to consumers that help explain how poker machines work, including information on how to interpret any posted ‘prices’; and
• the extent to which consumer behaviour changes as a result of this information.
(Emphasis added.)
397 It is apparent that the requirement to display the RTP, as it is now found in the Regulations and in the National Standard, does not achieve this objective. Nevertheless, this would appear to be the source of the decision to include a requirement to display RTP information.
398 Aristocrat also directed the Court’s attention to some remarks made during question time in the Victorian Parliament in March 2002 by the then Minister for Gaming, Mr Pandazopoulos, prior to the introduction of the Gambling Regulation Act. The only purpose of doing so would be to prove that what the Minister said about the purpose of the legislative reform was true, and that would be an infringement of parliamentary privilege: see Constitution Act 1975 (Vic), s 19(1) and the detailed discussion of the application of Victorian parliamentary privilege by the Federal Court in Mees v Roads Corporation [2003] FCA 306; 128 FCR 418 at [72]-[86] (Gray J).
399 Aristocrat further directed the Court to the regulatory impact statement for the Gaming Machine Control (Responsible Gambling Information) Regulations 2002. The regulatory impact statement relevantly states:
The objective of the Regulations is to foster responsible gambling by regulating the provision to players of gaming machines of information relevant to gaming on gaming machines.
Various bodies in the gaming industry have prepared booklets or brochures containing some player information, but there are no standards or minimum requirements with which these publications must comply.
An Inquiry Report by the Productivity Commission in 1999 on Australia’s Gambling Industries recommended better disclosure of the price of playing gaming machines, and of the likelihood of receiving high paying winning combinations.
The Report also recommended the provision to consumers of relevant information about the nature of games, such as the fact that machine wins and losses are independent of past results, and that where possible, consumers should be provided with records of their spending.
The problem addressed in the RIS relates to the rights of players of gaming machines as consumers. It has been argued that according to the principle of informed consent, players need to be provided with sufficient information to enable them to make informed choices about their commencement and continued participation in gaming.
The Regulations have been proposed as the most effective solution to this problem.
The proposed Regulations:
…
• Require each gaming machine to display the following information in relation to each game that may be played on that machine:–
• the return to players of that game;
…
400 This extrinsic material also directs attention back to the Productivity Commission recommendations as the source of this requirement. As I note, what the Productivity Commission contemplated would be included by way of information bears little or no resemblance to the RTP information as now required or displayed. Beyond that level of generality, the parties did not direct the Court to any other evidence concerning the purpose of requiring the RTP to be disclosed, nor any evidence which was relevant to how the Parliament considered disclosure of the RTP, as that phrase has been explained in the evidence by Ms Bryant, assisted gamblers as consumers in making better choices about their gambling.
401 Section 7.1 of the National Standard defines RTP as:
The ratio of total wins (including progressives and other features) to the total turnover in a game cycle.
402 In turn, the Standard defines a “game cycle” as the total number of possible outcomes of a game, on a given machine. In the applicant’s closing submissions, she submits that a cycle involved all possible permutations and combinations of the particular game, of which there are more than 35 million in the base game alone. That is, the RTP figure of 87% relates to what would happen, in mathematical theory, in terms of the percentage of overall money gambled and returned to all users of the machine, if more than 35 million “games” are played on a particular machine.
403 In other words, as Ms Bryant explained, the definition in the Standard is based on “the calculation of the probability of each possible outcome occurring and the amount that those outcomes will pay in proportion to the total amount wagered to achieve them”. It is theoretical calculation because, due to the random number generator on an EGM, the poker machine does not in fact cycle through every possible outcome. Random selection being what it is, some outcomes may appear more than once, some not at all.
404 In cross-examination, Ms Bryant was taken to some graphs which illustrated visually the outcome she described in her evidence in the following way:
Over time, an EGM would be statistically expected to approach its theoretical RTP - in other words, the actual amount of money returned to players as a percentage of the total amount bet on a game will get closer to the theoretical RTP as more games are played.
Accordingly, the theoretical RTP is a figure in which both regulators and gaming machine operators are interested.
405 Ms Bryant was also taken to an article by Luke Freeman and Daniel Mitchell of the Gaming Technology Branch of the Office of Liquor Gaming and Racing, Communities NSW, entitled “A 20 Game Survey of Gaming Machine Volatility in NSW”, dated 3 November 2009, being a report to the Responsible Gambling Fund Trustees. This part of the cross-examination was conducted in closed Court, however I do not consider that there is anything confidential about this aspect of the cross-examination. Ms Bryant was taken to the graph below, which was a scatter chart referred to in the article:
406 According to the article, this graph shows:
the RTP of a popular game operating in NSW. The game has a theoretical RTP of 87.95% and each ‘point’ in the plot represents the cumulative recorded play on a machine operating in the field. The collection of machines follows an expected statistical behaviour where the longer the game is played, the closer its actual RTP comes into accordance with its theoretical RTP. The player’s expected RTP for a three hour play session would be virtually at the zero point at the left-hand side of the horizontal axis.
(Emphasis added.)
407 During cross-examination, Ms Bryant accepted that this graph “looks the way I would expect to see the return to – the spread of the return to player converge on the mean over a period of time.”
408 In simple terms, the graph is a visual representation of the RTP over the cycle of a game – that is, over the more than 35 million possible outcomes. The blue line in the middle depicts the theoretical RTP. The longer the game is played, the closer the actual, cumulative, return to all players of the machine will align with the theoretical RTP.
409 The minimum RTP for machines at Crown Casino is 87%. However, Ms Bryant deposed that the usual range for the Dolphin Treasure is an RTP of between 87% and 91%. Her evidence was that operators of EGMs will ordinarily request each EGM game they purchase from Aristocrat to have an RTP in a narrow and specific range, such as between 88% and 91%.
410 Ms Bryant explained that one of the main reasons for the development of different versions or configurations of reel strips and symbols on an EGM is to achieve the required RTP range, since configurations of the reel strips and the number of times each symbol appears are two of the principal mechanisms of affecting probabilities of winning lines. Ms Bryant also explained how reel “length” (or “size” in the applicant’s terminology) is not determinative of the RTP, and how the same probability of outcome can be achieved with reels of equal “length”:
Reel length, by itself, is not determinative of the RTP. For example, if an EGM game had four reels of 20 symbols and a final reel of 30 symbols, a game where the reel strips for each of the first four reels were extended by duplicating the same sequence two more times and the reel strip of the final reel was extended by duplicating the same sequence once more would be mathematically identical and indistinguishable to a player.
In this game, each of the reels would be 60 symbols in length, and the probabilities of any given symbol appearing on any reel after a spin would be unchanged.
In practice, this is not done because it is unnecessarily duplicative and serves no purpose since the player’s experience would be identical. Longer reels are computationally undesirable for the reasons explained in paragraph 70 above.
411 Having made those preliminary findings, I turn to the applicant’s allegations.
The alleged Risk representation is made
412 At [14] of the further amended statement of claim, the applicant alleges:
The Return to Player Information conveys a representation to a person playing the Dolphin Treasure EGM that:
(a) the risk in statistical terms that the person is undertaking by playing the Dolphin Treasure EGM is that the person will only retain 87.83% of the total money he or she wagers in any one session of play; and
(b) the risk in statistical terms that the person is undertaking by playing the Dolphin Treasure EGM is that the person will lose 12.17% of the total money he or she wagers in the session.
(the Risk Representation).
413 To recap, the information on the player information display on the Dolphin Treasure EGM appears in the following form, relevantly to the Risk representation allegation:
ELECTRONIC GAME INFORMATION
DTreasure
…
Total Theoretical Return to Player of This Game = 87.97%
…
Theoretical Number of Individual games played a minimum bet per win = 8.71
…
Chances of Winning
(Based on MINIMUM BET selection & excluding feature wins)
Top Five Winning Combinations Bottom Five Winning Combinations
… …
414 As the applicant submits, the contents of the screen are all directed to the chances that each gambler has of particular wins in the session, and how long on average there is between wins by the player at the minimum bet. In other words, the statements on the screen are individualised for the gambler who accesses the screen. Indeed, the whole point of the player information display, and the invitation to a gambler to access it, is so that the gambler, as an individual, can receive more information about the EGM she or he has decided to use. The statements in the player information display purport to have an official, and authoritative, quality about them – that is apparent from the circumstances in which they appear. This is likely to contribute to a gambler understanding the statements are directed to her or him (as the user of the EGM), and to her or his session.
415 It is a small but important point, and one made by the applicant, that the RTP figure is described in the text on the screen as a theoretical return to “Player of this Game”, in the singular. Whereas, in the regulatory impact statement for the amendments to the Gambling Regulations that introduced the requirement to display the RTP, the government said the Regulations will:
Require each gaming machine to display the following information in relation to each game that may be played on that machine:
• the return to players of that game; and
• the average number of individual games played per any win; and
• the chances or odds of achieving the top and bottom five individual winning combinations; and
• the maximum and minimum bet options available.
(Emphasis added.)
416 The plural is also used in reg 22 of the 2005 Regulations and reg 5 of the 2015 Regulations, which impose the requirement: see [124]-[125] above. The departure in the example given in the National Standard, and in the statement that appears on the player information display on the Dolphin Treasure EGM, is unfortunate, and also contributes to giving a wrong impression about the function, and effect, of the RTP.
417 I do not accept Aristocrat’s submission, made in reply, that the use of the singular “player” is “of no moment”. Aristocrat submits that it is:
…used without an article in a singular collective form, which is a common way of referring to a group (eg “the rights of man”) particularly when expressing rates, percentages and averages. No reasonable person reads that there are 0.7 cars per person in Australia and concludes that each person owns seven tenths of a car.
418 As I have found, the context of the rest of the information on the player information display is individualised. It is directed at each gambler who plays a session on the machine. That is how it is likely to be understood. I do not accept the hypothetical gambler would read into this expression a reference to “player” as referring to a singular collective group.
419 Rather both context and the singular in the language used, combine to make it likely each hypothetical gambler who accesses this information would believe the information was directed towards what would happen during her or his session.
420 I do not accept the premise of many of Crown’s submissions on this claim: namely that the applicant’s case involves the proposition that the RTP is a “guaranteed” percentage return to the gambler in a given session. That is not how I understand the applicant’s case. Rather, as the applicant’s closing submissions state, her case is that:
The screen misleadingly conveys a representation to each player who accesses it, that that player can expect a return approximating to the specified percentage in the session they are playing or about to play.
(Emphasis added.)
421 In other words, the statement on the screen is said to encourage an expectation, or belief, in the hypothetical gambler that she or he can expect to get back around 87% of what she or he bets. The fact that the percentage is well short of 100% is consistent with the statements in other material published or made available by Crown that the “machine always wins”. Such a statement is also consistent with Victorian government brochure entitled “Keep track of your time and money”, which says, with reference to the RTP, “over time you are more likely to win less money than you spend”. It is also not inconsistent with the statement in the “Playing the Pokies: Know the Facts” brochure, which states “[t]here is no individual requirement for an individual poker machine actually to return the expected rate in any given period of play.”
422 Therefore, both textually, and in the context in which it appears on the player information display, I am satisfied the Risk representation alleged by the applicant is made.
The Risk representation may be confusing but is not misleading
423 The applicant did not press all of the allegations in [15] of the further amended statement of claim about how the Risk representation was misleading or deceptive. Rather, she pressed only the allegation in [15(a)], which states:
15. In fact, contrary to the Risk Representation:
(a) the Return to Player Information reflects the return to the venue operator calculated by reference to a cycle of operation of the Dolphin Treasure EGM involving all possible permutations of play, a cycle that is irrelevant to the actual time spent by any one player playing the Dolphin Treasure EGM in any one session of play;
424 The evidence establishes this is an accurate description of the RTP. As I noted, there is no clear evidence about what the policy thinking behind this requirement was, given that it has no bearing at all on what an individual gambler might expect to occur during a gambling session on an EGM, and given that nothing remotely like the Productivity Commission’s recommendations ended up being included.
425 The respondents placed some emphasis on the use of the word “theoretical”, contending the hypothetical gambler would, by the use of this adjective, understand that the percentage was not referring to any return to her or him, but rather a theoretical return. I do not consider the use of that adjective would necessarily be understood in that way. It could just as easily be understood to mean that calculations had been undertaken, in a scientific way, to ascertain the percentage return to a player. The adjective certainly conveys, in my opinion, a sense that some mathematical or scientific calculation exercise has been undertaken. In her pleading the applicant uses the word “statistical” and I accept this is an appropriate description. Certainly, the hypothetical gambler is likely to assume some analysis has been undertaken to reach such precise figures. I do not consider the adjective conveys more than that, in the context in which it appears.
426 There is at least one item of direct evidence from a lay witness about how she understood the statement about RTP. In her supplementary affidavit at [10], Ms Mitchell deposed:
I understood this [the RTP] to be a regular payout figure.
427 She deposed that she learned of the RTP through newspaper reports, rather than seeing it on the screen herself, which diminishes the weight of her evidence to some extent. It also supports, at least indirectly, the respondents’ point that any confusion engendered by the language and placement of the RTP information would be dispelled once a gambler started to use the machine, and it became apparent that she was not getting back around 87% of what she was gambling (whether because she was getting back more, or less, the latter being far more probable).
428 Further, the applicant is correct to submit that, the statement is irrelevant to the individual player. It has, as Ms Bryant points out, a value to the manufacturer and to the casino operator (and perhaps to the regulator). It has no value to an individual gambler. Its co-location with information that is of value and relevance to the individual gambler as she or he uses the EGM adds to the confusing nature of the statement.
429 As I have noted, the use of the plural in the regulations is of some importance. A description of the RTP which properly took account of the use of the plural in the regulations would, I consider, be differently expressed.
430 For these reasons, I consider the representation is likely to cause confusion to the hypothetical gambler. The gambler is likely to believe, at least momentarily, that the statement is directed at her or his individual chances of winning on the machine.
431 That belief will, in my opinion, soon be dispelled in a practical sense, and is also likely to be remedied by the gambler looking at some of the information available at Crown Casino (not all the brochures at Crown deal with the RTP) or on the internet. There may be some fleeting confusion, but nothing more.
432 One of the early leading s 52 cases that distinguished “confusion” and “wonderment” from “being led into error” was McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd [1980] FCA 159; 33 ALR 394. In that case a Full Court of this Court held there was no contravention of s 52 in the use by McWilliams of the expression “BIG MAC” in advertising one of its brands of wine and that potential purchasers would not be led into the error of believing there was a connection between McWilliams business and that of McDonalds. The trial judge had considered a line of authority which he held equated confusion or wonderment with misleading conduct for the purposes of s 52. The Full Court held there was no such equation and the concepts were distinct, with the result that if conduct engendered only confusion and wonderment it would not contravene s 52. At 412, Fisher J described confusion and wonderment in the following way:
However, the sense in which the trial judge made use of the word “confusion” was more referable to a state of mind at an earlier stage, namely the state of mind of a person whose preconceived ideas have been disturbed and who is in a state of wonderment in consequence of this disturbance.
433 Then, a little later at 413, his Honour said that he could see no basis to construe s 52 as intended “to cover confusing conduct in the sense of conduct which merely causes the public to reconsider or doubt its preconceived ideas”. His Honour’s statements were approved by Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at 198.
434 Similarly, confusion which is merely “transient and ephemeral”, or confusion which is resolved “at the point of inquiry” has been held not to give rise to a finding of misleading or deceptive conduct: Bing! Software v Bing Technologies [2009] FCAFC 131; 180 FCR 191 at [51]-[54] (Kenny J, Greenwood and Logan JJ agreeing), considering Collier J’s reasons in Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760 at [75].
435 See also my reasons in Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865 at [208]-[213], and the authorities there cited. As I said in that decision at [211], “[c]onfusion or uncertainty would suggest less particularity, and a more amorphous state of mind. Error suggests something much more identifiable and concrete.”
436 Whether or not the hypothetical gambler sits down to a Dolphin Treasure EGM with any “preconceived ideas” about her or his odds of securing winning lines when using the EGM, the additional agreed fact in relation to the Risk representation allegation is that the hypothetical gambler has accessed the player information display. That signifies a gambler who wishes to have more information about how the EGM works. It also signifies a gambler who is, at least, curious, about her or his odds.
437 In those circumstances, the representation about the RTP would certainly cause such a gambler to wonder about what percentage of the total money she or he wagers she or he is likely to retain. The figure 87.97% (to take the example in [413] above) is less than 100%, so the gambler is under no illusion that there is likely to be some loss.
438 However as she or he starts to play, the hypothetical gambler who has consciously chosen to access this screen, and (I infer, in favour of the applicant) read that representation, would not continue to assume or expect that she or he will receive somewhere around 87% of her or his money back during the session on the EGM. That is because any such initial impression gained from the context and language on the player information display about the RTP will be more or less immediately dispelled by the random outcomes as the gambler makes bets, and experiences losses and wins. It would become apparent to the hypothetical gambler that, given the random and unpredictable outcomes she or he experiences, there is no real likelihood she or he will receive 87% of her or his money back, or correspondingly, there is no real likelihood that she or he will lose only about 12% of what she or he has wagered. Rather, the randomness and unpredictability of what happens to a gambler in an individual session will become obvious. Actually engaging in betting on the EGM will dispel any initial expectation the gambler may have had that she or he will have around 87% of what she or he bet returned. The erroneous belief will be entirely transient as the reality of random outcomes intrudes.
439 If the hypothetical gambler continues to expect to receive back most of what she or he gambles, or even continues to expect to win more than she or he has gambled, then that is not because of the Risk representation. Rather, it is because the hypothetical gambler harbours unrealistic expectations, perhaps engendered by habituation, or by any number of other personal, emotional and psychological factors. There is then no causal link between the Risk representation and the assumptions made, the cause of the assumptions coming from factors personal to the gambler: see Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564 at [64]-[65] (French J).
440 Further, the hypothetical gambler who was curious enough to access the player information display is also the kind of gambler who is just as likely to access any of the brochures and information available at Crown Casino or materials available online. Certainly, that would be a step which a person concerned to understand her or his odds would take, in order to take reasonable care of her or his own interests: see Puxu at 199. If a gambler is interested enough to access the player information display, read the RTP statement, and then receives a representation (as I have found) suggesting she or he might walk out of the casino with around 87% of the money she or he spent on the EGM, then in my opinion, such a person would look further for information to confirm whether that is really likely to be the case. Senior Counsel for the applicant conceded in final submissions that most patrons at Crown Casino would pass by a stand of the available pamphlets at some stage during their time in the Casino. That concession was properly made. It was clear on the view that the stands with information are displayed in locations where they are easily seen, and easily accessed.
441 The brochures at Crown are quite explicit on the subject of the RTP:
442 I pause here to note that the reference to “each calendar year” in the brochure refers to s 3.6.1 of the Gambling Regulation Act, which requires a casino to ensure that the payout table on each EGM is set so as to return to players at least 85% of the total amounts wagered each year at that venue.
443 The hypothetical gambler who read this statement could not labour a moment longer under any belief she or he may see a return of around 87%.
444 Whether by actually gambling on the EGM and experiencing outcomes, or accessing the available information, any confusion or initial impression engendered by the RTP representation would be quickly dispelled. For that reason I do not consider the Risk representation is misleading within the meaning of that term in s 18 of the ACL.
445 My conclusion means the applicant has not proven a contravention of s 18 in relation to the Risk representation. However, the applicant has proven that an incorrect representation is made. A simple corrective statement would alleviate the issue. In her closing submission, the applicant submits that:
There would have been no impediment to Aristocrat including an explanation along the lines of that which is published by the Victorian government: “It takes millions of games for a machine to tend towards its ‘return to player’ setting. There is no individual requirement for an individual poker machine actually to return the expected rate in any given period of play.”
446 Nor would there be any impediment to returning to the kind of example given in the Productivity Commission’s report, which was after all the apparent origin of the RTP requirement. It is undesirable, even if it is not unlawful, that gamblers be given any message about prospective returns from their gambling which could led to erroneous expectations, even if fleeting.
The s 18 claim as against Crown
447 Since I have found the Risk representation is neither misleading nor deceptive, there is strictly no need to consider any further the liability of Crown, assuming my findings had been different. However there is one matter which is closely related to the nature of the Risk representation, so I consider it is appropriate I express my opinion on that matter.
448 Crown submits that if the Risk representation alleged is made (as I have found), it is a representation as to a future matter. It then submits it had a reasonable basis for making such a representation:
That reasonable basis includes the fact that the game was approved by the VCGLR under s 3.5.4 of the Act, which requires the VCGLR to approve or refuse to approve a game having regard to (inter alia) player return; game fairness and security and responsible gambling; and any standards in force. The Act also sets out the method for calculation of the Return to Player amount, which also provides reasonable grounds. The RTPs are set by Aristocrat, within a range described in the regulations and in Crown’s EGM specifications, and are tested and approved by the VCGLR before the EGM is made available to play at Crown.
449 Had I found the Risk representation to be misleading, I would not have been inclined to accept Crown’s submission that the statement about the RTP was a statement as to a future matter. As the authorities to which Crown referred in its submissions demonstrate (see e.g., Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 167; 2 FCR 82 at 88 and Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 at [10]), a representation as to a future matter is generally characterised as an expression of an opinion: it can hardly be otherwise if a statement is being made about what will happen in the future.
450 The Risk representation is not an opinion. It is a statement of mathematical fact about the operation of a particular EGM, as configured. It represents to the hypothetical gambler what her or his chances are, when she or he is reading the statement, of retaining and losing money wagered when she or he uses the machine. That, of course, is not what the RTP statement is supposed to be about, but that is the meaning I find it conveys, for the reasons I have set out above.
451 Crown’s arguments about being a “mere conduit” do not strictly arise for determination on the findings I have made. However, I would not have been inclined to accept Crown’s argument on this matter. Crown may not have the capacity itself to alter the configuration and programming of the Dolphin Treasure EGM, but it has the capacity to negotiate with Aristocrat about how the machine looks and how it operates, as with any other aspect of what is otherwise, as Crown submits, a conventional commercial relationship.
452 Especially so in relation to the Risk representation. Crown has the capacity to provide more accurate information to gamblers about the RTP, how it is calculated and what proportion of money received by Crown is required to be returned to gamblers. It is no more bound by the text in the example in the Standard than Aristocrat is. Indeed, given gambling occurs on its premises which it controls, it is the entity best placed directly to inform members of the gambling public though signs and brochures. The evidence reveals Crown in fact allocates considerable resources to doing just this. It could do so about the RTP, at least now the difficulty about the current form of the player information display has been identified. It has choices available to it, and is not a mere conduit.
453 In Gardam v George Wills & Co Ltd (1988) 82 ALR 415 at 427, in a passage cited with apparent approval by the plurality in Google at [12], French J said:
The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in making that representation … When, however, a representation is conveyed in circumstances in which the carrier would be regarded by the relevant section of the public as adopting it, then he makes that representation. It will be a question of fact in each case…
454 The key question (of fact) is whether the respondent has, or would be understood to have, adopted or endorsed the representation: see Google at [15].
455 The present circumstances are in no way akin to publication of an advertisement. The Dolphin Treasure EGM is a machine either purchased outright by Crown, or supplied to it on licence. It is placed within the Crown Casino, in circumstances where Crown controls who enters and who can use the machine. The EGMs have Crown’s details placed on them, and also have messages from Crown displayed on them: see the screenshots at [58] and [62] above. One of those messages, displayed repeatedly is “Discover the World of Crown”. In my view, it is likely that the hypothetical gambler would understand that whatever information about her or his prospects of securing a return on her or his bets was displayed on the machine was information that Crown endorsed and adopted. After all, it is Crown who receives the income from the bets placed, and I find the hypothetical gambler would know and understand that to be the case.
The s 18 claim as against Aristocrat
456 Since the findings I have made above all concern the features of Dolphin Treasure EGM, and since Aristocrat is responsible for the design and configuration of those features (to some extent in accordance with Crown’s requirements in relation to the machines destined for Crown Casino), the findings I have made above apply equally to the applicant’s case against Aristocrat.
457 The case against Aristocrat fails for the same reasons: the first two alleged representations are not made, the third representation is made but is not misleading, only likely to engender some fleeting confusion that would be readily dispelled.
458 Accordingly, it is not necessary to determine the applicant’s primary contention against Aristocrat: namely that “by supplying the game for use by the public – Aristocrat is engaging in conduct that is likely to mislead or deceive”. Had it been necessary I would have accepted the following submission on behalf of the applicant, which I consider is clearly correct:
Aristocrat supplies the Dolphin Treasure EGMs through ongoing licensing arrangements, and receives performance reports from Crown which make it clear that the EGMs are available for use by the public.
(Footnotes omitted.)
459 Since I have found there has been no contravention of s 18, no question of any accessorial liability in Aristocrat arises. Resolution of the allegation of accessorial liability is more complex than the applicant’s primary case, because it relies on proof that Aristocrat had actual knowledge of “the essential matters that constitute the contravention”: see Re HIH Insurance Ltd (In liq) [2016] NSWSC 482; 335 ALR 320 at [26] per Brereton J; Yorke v Lucas [1985] HCA 65; 158 CLR 661 at 667. I do not consider it appropriate to make findings on that issue, given the conclusions I have reached.
The unconscionability claims
460 I consider that, as the respondents submit, there are a number of key, preliminary bases on which the applicant’s unconscionability allegations must fail. That being the case, I do not propose to go on and make findings in the alternative about some of the more complex evidentiary and legal issues. There are real debates to be had, on the law and on the facts, about some of those matters, especially in relation to the state of research and knowledge about gambling addictions, and pathways to addiction, including the role of what is called the “dopamine effect” on the development of gambling addiction. Although I refer to some of these matters in this section of my reasons, I do not propose to make any findings beyond those necessary to determine the outcome of this proceeding. The failure of the applicant’s allegations in this case is just that: a failure of the particular allegations made, on the evidence adduced. It is neither necessary nor appropriate in those circumstances for the Court to make any broader pronouncements, by reference to aspects of the evidence, on some of the complex issues to which the legalisation of gambling on poker machines gives rise, including whether and how EGMs contribute to the development or continuation of a gambling disorder, or to the development or continuation of a habit or pattern of gambling that is harmful to a person.
General findings
461 I accept that that the Dolphin Treasure EGM is programmed to play sounds, and to make lights flash, to accompany any “win”, whether or not the amount of the “win” is greater than the amount bet, and thus to give “celebratory feedback” to the gambler, even if the gambler has lost more than she or he has “won”. The respondents did not dispute that this feature exists on the machine, as they did not dispute the three features on which the applicant relied in the s 18 case (see [327] above]), and also relied in the ss 20 and 21 cases, although of course they disputed the characterisation of these features.
462 The respondents also did not dispute the essential characteristics of what the applicant calls “losses disguised as wins”, even if they quarrelled with the terminology. Whatever description is applied, the respondents did not dispute that there are many occasions during a gambler’s session where what will be identified as a “win”, and accompanied by celebratory feedback, will be a sum of money less than the sum of money the gambler placed on that particular bet.
463 What each of the respondents disputed was the proposition that any of these features could lead to a conclusion of contravention of ss 20 or 21 by either of them.
The pleaded class: “Vulnerable Players”
464 The applicant’s closing submissions recognised the challenge faced in her unconscionability case, in terms of identifying the class of people said to be the victims of the unconscionable conduct.
465 The pleaded description is people who are “vulnerable to becoming habituated and/or addicted to playing EGMs, including the Dolphin Treasure EGM”. There was a dispute between the parties about what “habituated” and “addicted” meant, or could mean, in this description. The applicant gave particulars about the meaning she asserted:
By “habituated” is meant that a person is drawn to play the EGM regularly (at least once a week) and unable to resist the temptation to do so.
By “addicted” is meant that a person plays the EGM regularly and will spend his or her resources in doing so even when it is beyond that person’s means to play so regularly. Vulnerable Players include those who are already habituated or addicted, which sub-category will be referred to as “Addicted Players”. Addicted Players are those who would fall within 3-7 and 8+ on the Problem Gambling Severity Index. The number of Addicted Players according to the Productivity Commission in its 2010 inquiry report into gambling is about 30% of players of EGMs. …
466 The applicant’s closing submissions emphasises that the pleaded group is not only those gamblers who were, at the time of the conduct, already habituated or addicted, but also those who were vulnerable to becoming so. The applicant submits this accommodates the difficulty of anyone, including Crown employees, being able precisely to identify any specific individual as “disordered, problem, irresponsible or excessive”. She submits it was precisely for such a case as the present proceeding, where the class exists but is difficult to pin down in any individual concrete case, that statutory unconscionability in s 21 exists, relying particular on the terms of s 21(4)(b) which provides that:
this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour.
467 It may be accepted that a claim of a contravention of s 21 can succeed in relation to a system of conduct or pattern of behaviour by a respondent, without proof that a specific individual has been disadvantaged: see Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liq) (No 2), [2017] FCA 709 at [59]-[66] (Beach J). The Get Qualified case is a good example of the operation of the terms of s 21(4). It concerned a corporation operating a business assisting and advising customers to obtain nationally recognised qualifications from registered training organisations (RTOs). The impugned conduct (also impugned under s 18) included enticing customers into making agreements under which they paid substantial sums of money, by making false and misleading representations about the company’s services, requiring full payment in advance and refusing to give refunds when the services were not provided, or not adequately provided despite making a “100% money back guarantee”; and initiating debt recovery proceedings against customers who had sought refunds. Unconscionable conduct against four individuals was alleged, as well as a system or pattern of conduct against the consumers who entered into agreements with it. On the latter aspect of the case, there was a clear delineation between who fell into that class, and who did not, based on the existence of a contractual relationship, or steps towards a contractual relationship, between the consumer and the corporation. In other words, although the ACCC relied on systemic conduct by the first respondent, there was no doubt about the group of persons to whom the conduct is directed.
468 That is not the case here, both because the definitional aspects of the applicant’s selected group were contested, and because of the vagueness of the key attributes of the alleged members of the group.
469 The respondents submit that by using the terminology “addicted” and “habituated” in ways that were not consistent with current psychiatric and psychological understanding in the context of defining a group of consumers for the purposes of s 21, that terminology had no utility. The applicant’s closing submissions did not shy away from the difficulty in defining or determining the scope of people who fell within the group of “Vulnerable Players”. The applicant made a general submission:
While there is disagreement about how to describe or identify disorderly, problem, irresponsible or excessive gambling, there is widespread agreement (and Crown and Aristocrat do not contend to the contrary) that there are people in the community who have problems with gambling.
470 It should be noted that the adjectives in this submission – “disorderly, problem, irresponsible or excessive” cast the net rather more widely than the applicant’s pleadings. For example, it is difficult to see how a person who gambles “irresponsibly” could have a “special disadvantage” for the purpose of a s 20 claim.
471 Aside from submissions at this level of generality, the applicant’s closing submissions did not engage with the vagueness of the terms she used to define the class of consumers for the purposes of the unconscionability case. The applicant did make a positive submission that the term “addicted” extended to people who had not been diagnosed with a gambling disorder in accordance with DSM-5, contrary to the opinions of the respondents’ experts.
472 The applicant contends that Crown and Aristocrat are both aware that there would be a group of people using the Dolphin Treasure EGM who have problems with gambling. She does not refer to any particular evidence, but it is correct that neither respondent denied some of the patrons of Crown Casino (or more generally, in the community) would meet this description, and indeed Crown undertakes a number of activities directed at such people in its Casino. Aristocrat also expressly accepts that there are gamblers who “experience problems with their EGM gambling”. The applicant also relies on the “13 observable signs” used by Crown employees to identify individual gamblers who may be experiencing difficulties controlling their gambling. Evidence about the signs used by Crown employees and the purpose of looking for those signs was given by Ms Bauer. She deposed that the 13 observable signs are:
(a) Self-disclosure by an individual of a problem with gaming or a request to self-exclude;
(b) Requests for assistance from family and/or friends concerned about an individual’s gaming behaviours;
(c) Children left unattended while their parent/guardian gambles;
(d) An individual becoming angry while gaming or showing signs of distress during or after gaming;
(e) An individual who gambles for long periods without a break;
(f) Signs (for example, witnessing or hearing) that that an individual was trying to borrow money for gaming;
(g) Complaints by an individual to staff about losing or blaming the Casino or gaming product for losing;
(h) Unrealistic remarks by an individual about gaming;
(i) Observed conflict over gaming between family members or friends;
(j) Significant decline in an individual’s personal grooming or appearance;
(k) Secretive or embarrassed behaviour about being at the Casino or staying on to gamble when friends leave the venue;
(l) Gambling without the individual reacting to what is going on around him/her and avoiding contact or conversations with others; and
(m) Frequent visits to the ATM.
473 Ms Bauer deposed that if a staff member recognises that observable signs are being exhibited by a customer, they are to contact their manager or Crown Responsible Gaming Support Centre directly, and speak with a liaison officer. The protocol is that the liaison officer would then observe the customer herself or himself and decide whether to approach and assist the customer. It is the responsibility of the liaison officer to consider the most appropriate way of approaching the customer. The liaison officer may encourage the customer to attend the Responsible Gaming Support Centre.
474 I take into account and rely upon the evidence of Ms Bauer, and the clear position of Crown in terms of the active steps it takes to identify and assist those people who are experiencing problems controlling their gambling behaviour, including (but far from limited to) persons who may suffer from a gambling disorder diagnosed in accordance with DSM-5. The admissions from both respondents, combined with the evidence about how Crown uses the “13 observable signs”, support the proposition that it is possible to identify a group of people who are experiencing problems controlling their gambling behaviour, and indeed that it is possible for the respondents to do so.
475 That is not to gainsay the force in the respondents’ submissions about the elasticity of the class as the applicant describes it, and the problems with determining in some concrete way who falls within and outside it. However, I am prepared for the purposes of the findings I make to take the applicant’s class of “Vulnerable Players” at its highest, and proceed on the basis that there is, as the applicant alleges, a group of consumers of gambling services who can be described as being either habituated or addicted to gambling, and who experience problems controlling their gambling behaviour. For the reasons I set out below, I do not consider on the present state of authority it would be correct to find that they are necessarily “vulnerable”, certainly not in the sense of having a “special disadvantage” for the purposes of the equitable concept of unconscionability.
Summary of my conclusions
476 I consider the ss 20 and 21 cases must fail at the early stages of their arguments for the following principal reasons:
(1) A cause of action under s 20 cannot succeed where no individual has been identified as the innocent party. The applicant identifies no such individual and therefore there are no details of the relationship between that innocent party and the party alleged to have acted unconscionably.
(2) Putting to one side the difficulties attending the class of “Vulnerable Players” as defined, and the absence of an identified individual, the “special disadvantage” which the applicant must establish for the purposes of s 20 and the unwritten law is, on the authorities, unlikely to be made out. That is because on the evidence those individuals with a gambling addiction or a gambling “problem” retain a level of control (even if “impaired” as the applicant contends) over their actions which is not consistent with the concept of a “special disadvantage” existing in a gambler. My reasoning on this conclusion also has some application to the s 21 case.
(3) The applicant has not proven any victimisation or exploitation, or any conduct on behalf of the respondents necessary to make out statutory unconscionability. The “impugned conduct”, in relation to the identified features of the Dolphin Treasure EGM, as the applicant defines them, does not involve any victimisation or exploitation of “Vulnerable Players”, accepting in favour of the applicant that this group can be identified with sufficient precision for the purpose of a claim under s 21. This finding builds on some of my findings in the s 18 case, together with additional findings.
477 These three conclusions are sufficient to reject the applicant’s unconscionable conduct case. I turn to explain why I have reached those conclusions.
The section 20 claim
478 There are at least two clear reasons why the applicant’s claim under s 20 must be rejected, each reason having been advanced by the respondents. The reasons are related: the absence of an identified individual who has been victimised or exploited by the respondents; and the absence of any identified special disadvantage. I deal with the latter point at [485] to [506] below.
479 Aristocrat relies on the following observations by French J in Berbatis (No 2) at [42] (although it dealt with the predecessor provision to s 20):
There is no rule of equity which prohibits unconscionable conduct. Rather there are remedies available to relieve against or prevent such conduct in certain classes of case. The Act, however, creates a prohibition. What then does it prohibit? It prohibits conduct in respect of which a judge in equity would have been prepared to grant relief. The imposition of the prohibition precedes any actual or notional judicial decision. The judge deciding a case under s 51AA will be asking himself or herself whether he or she would have been prepared to grant relief at equity on the basis of an assessment of the conduct in question as unconscionable.
480 The approach outlined by French J necessarily requires the Court to be able to identify a person who has been the subject of the unconscionable conduct, so that the prohibition can be enforced against an identified person, for the benefit of an identified person, in the context of a specific characterisation having been given to the relationship between them. The Court in Kakavas at [18] expressed the principle in this way:
The invocation of the conscience of equity requires “a scrutiny of the exact relations established between the parties” to determine “the real justice of the case”. Where an appeal is made by a plaintiff to the standards of equity embodied in the Amadio principle, the task of the courts is to determine whether the whole course of dealing between the parties has been such that, as between the parties, responsibility for the plaintiff’s loss should be ascribed to unconscientious conduct on the part of the defendant. In Louth v Diprose, Deane J explained the basis on which the conscience of equity is engaged to apply the Amadio principle: “The intervention of equity is not merely to relieve the plaintiff from the consequences of his own foolishness. It is to prevent his victimisation.”
(Footnotes omitted.)
481 The applicant accepts that the state of the authorities requires the identification of a person who has been the subject of unconscionable conduct, however she submits the lay evidence from Ms Mitchell, Ms Bardsley and Ms Sommerville is sufficient to meet this threshold.
482 I reject the applicant’s submission. The applicant has not identified herself as such a person. She gives no evidence that she has ever been to Crown Casino. She gives evidence that the Dolphin Treasure EGM was one of the machines she played regularly, but at other venues (including interstate). This case is not about the supply by Aristocrat of Dolphin Treasure EGMs to other venue operators. It is about the supply of those machines to Crown, for use at Crown Casino, where Crown will – as Aristocrat knows and intends – make those machines available to the public. Relevantly to the confined circumstances of this case, the relationship for the purposes of s 20 needs to be a relationship between Crown and Aristocrat on the one side and a specific individual who has gambled on Dolphin Treasure EGMs at Crown Casino and has been the victim of unconscionable conduct by Crown and/or Aristocrat in the course of, or in connection with, that particular gambling activity.
483 None of the other lay witnesses can be considered as an individual who has been allegedly victimised or exploited by Crown and/or Aristocrat. Crown gives the following summary of the state of the evidence:
Ms Sommerville gave evidence of having gambled there [at Crown] only once: in 2002 (tab 21 at [25]), five years too early for her to have played on any of the 38 Dolphin Treasure EGMs the subject of this proceeding. Similarly, Ms Mitchell gambled at the casino in 1998-2000, prior to the 38 Dolphin Treasure EGMs (tab 25 at [16]-[17]). Ms McLaughlin and Mr Ingmire cannot recall (Ingmire tab 19 at [22]-[23]) (or does not specifically recall: McLaughlin tab 18 at [12],[31]) playing the Dolphin Treasure at Crown. Ms Bardsley considers it likely that she did play the Dolphin Treasure at Crown, but she cannot say for sure; tab 20 at [11].
484 As the applicant’s pleadings and submissions reveal, this case has never been about the relationship between the respondents and an individual who is or was addicted to gambling, or had difficulty controlling her or his gambling activity while using a Dolphin Treasure EGM at Crown Casino. The evidence about the activities of Ms Mitchell, Ms Bardsley and Ms Sommerville is so meagre and generalised that it could not possibly be sufficient for this purpose, and in any event the case was never pleaded or put forward on the basis that such a relationship existed between any or all of these women and the respondents. The applicant has never attempted to establish the kind of relationship which engages s 20 of the ACL. The claim under s 20 must fail for that reason alone.
No “special disadvantage” established
485 Unconscionable conduct, for the purposes of s 20 and the unwritten law, occurs in circumstances where a plaintiff or applicant is in a position of “special disadvantage”: see Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51 at [8]-[9], [13]-[14] (Gleeson CJ). Whether that disadvantage be described as “situational” or “constitutional” (see the discussion, and slight doubting, by Gleeson CJ in Berbatis at [9]-[10] of the usefulness of such categories), the adjective “special” is not to be ignored. One purpose of the adjective is to make clear that inequality of bargaining power is not enough: see Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447 at 462 per Mason J, and Berbatis at [12] per Gleeson CJ. Rather, as Mason J put it in Amadio, at 462, the “the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests”.
486 In some authorities, perhaps mostly earlier ones, the characteristic is called a “special disability”. Deane J in particular seemed to favour this phrase: see Louth v Diprose [1992] HCA 61; 175 CLR 621 at 638, and Amadio at 474. In Louth, the special disability or disadvantage was the extreme infatuation of the plaintiff with the defendant: that is, it was an emotional condition. Whatever the characteristic (and there are no rigid categories):
the nature of the relevant disadvantage concerns the ability of the weaker, or victimised, party, to make an informed judgment as to his or her interests: Bridgewater v Leahy [1998] HCA 66; 194 CLR 457 at [39] (Gleeson CJ and Callinan J); and
the essence of such weakness is that the party is unable to judge for himself: Blomley v Ryan (1956) 99 CLR 362 at 381, 392 (McTiernan J).
487 It is the exploitation of the disadvantage or weakness by the defendant or respondent that causes equity to intervene: see Louth at 626, 630-631 (Brennan J), 637 (Deane J), 654 (Toohey J, in dissent on the outcome but not on the principles); Blomley v Ryan at 405 (Fullagar J).
488 In Louth at 631, Brennan J also referred to a number of earlier cases where the distinction was drawn between a special disadvantage or disability, and the plaintiff’s foolishness, recklessness, unreasonableness or improvidence, none of which will suffice to justify equity intervening to interfere with a bargain struck.
489 The last point is worth emphasising for a different purpose: the whole point of an equitable claim of unconscionable conduct is to allow a court to relieve a person of an obligation assumed, or to deprive a defendant or respondent of a benefit gained (or to restrain either of those things occurring in the future), because of the circumstances in which the transaction, or proposed transaction is occurring. By its orders, a Court interferes in a legal relationship between parties. The Court does not engage in some general course of disapproval: its judicial power is exercised to secure an outcome in the context of a real, not hypothetical relationship between a person or group of persons with a special disadvantage and the person or persons who seek to exploit that disadvantage. In Louth at 638, Deane J put it this way (Dawson, Gaudron and McHugh JJ agreeing):
The intervention of equity is not merely to relieve the plaintiff from the consequences of his own foolishness. It is to prevent his victimization.
(Footnote omitted.)
490 Even in the absence of any authority, there may be a real difficulty in how these principles apply to a person who has difficulty controlling her or his gambling activities.
491 That is because, on the evidence of Professors Ladouceur and Nower, which I accept, even individuals suffering from a diagnosed gambling disorder maintain the ability to perform voluntary acts and make judgements in their own best interest when putting themselves in a position to use, and in using, EGMs. It is worthwhile reproducing the whole of the answer of the two professors to Questions 8 and 9 of the joint report.
492 The questions were:
To what extent does a person who is “habituated” or “addicted” or is suffering from a “gambling disorder”:
Question 8: Perform a voluntary act or acts when putting herself in a position to play, and playing, an EGM? ; &
Question 9: maintain an ability to make judgements as to her own best interests when putting herself in a position to play, and playing, an EGM?
493 Their answer was:
In our opinion, individuals suffering from gambling disorder maintain the ability to perform voluntary acts and to make judgements in their own best interests when putting themselves in a position to play and playing EGMs. Gamblers make a long and complex series of decisions when deciding to gamble: When to gamble, with whom to gamble, where to get cash, whether to use credit, how to get to the venue, what activities to play, whether to play machines and which machines, how many lines to play, when to cash out or reinvest, how to obtain extra cash if necessary to continue play, how to meet biological needs including eating or drinking during play, etc. All of these decisions involve voluntary decision-making.
The demands of this decision-making become more complex, not less, as a gambler develops gambling-related problems. Disordered gamblers lie to friends and family to get money to gamble, request bailouts with inventive excuses, steal or misuse money, divert legitimate expenditures to funds for gambling, and engage in a wide range of behaviors that often require a great deal of ingenuity and forethought. Unlike with drugs and alcohol, gamblers are usually able, through their resourcefulness, to hide the effects of their gambling from friends and family until many or most of the assets are gone. Despite excessive levels of play, then, problem gamblers remain able to make judgments that they believe to be in their own best interests and perform a series of voluntary acts to prolong play. [Nower report, §13.1, p. 20]. In this case, there was educational material available to the Applicant that explained terms like “return to player” and “random number generator,” detailed the statistical odds of winning, the way machines work, and methods for checking actual wins and losses during play, then clearly stated: “In the end, the machine will win.” A player would have to make a volitional choice to ignore these materials as well as the warnings they contain to persist in spending money they knew or should have known they would lose in order to continue playing. The fact that gamblers often choose to make bad judgements does not detract from their ability to do so [Ladouceur report, §80, p. 36].
494 I infer the last sentence is intended to mean “does not detract from their ability to make judgements”.
495 Herein lies the real difficulty for the applicant, in fitting her arguments within the concept of special disadvantage (in the case as she has chosen to present it): whatever level of dysfunction is selected (a gambling “problem”, an inability to control gambling, the recognised psychiatric condition of a gambling disorder), to prove that across the spectrum of a widely defined group of individuals (all with their own strengths and weaknesses, and different personal, financial and living circumstances) that group should be determined to have no capacity to make judgements for themselves, is a significant challenge indeed.
496 For similar reasons to those I expressed in relation to the s 18 case, the applicant’s evidentiary case falls well short.
497 For the applicant to contend, as she does in her closing submissions that the Vulnerable Players’ “ability to make decisions in their own best interests, or to exercise control, is impaired” does not approach satisfaction of the concept of special disadvantage. A person who is reckless may well have an impaired ability to control herself or himself: indeed, such a lack of ability might be inherent in describing a person as reckless.
498 In her closing submissions, the applicant selected the following passages from the evidence of the lay witnesses, in support of her contention about the impaired control “Vulnerable Players” experienced:
366. The lay evidence adduced by the applicant also supports the above notion of impaired control.
(a) Shonica Guy said that “I would often feel like I could anticipate when the machine was about to pay”, and that “[t]he longer I stayed on a machine, the more sure I would feel that it was due to pay out. I would enter a zone and focus on the game that I was on. I would not think of much else. Occasionally my mind would wander to the other things I should be doing such as my work commitments as l would often gamble during work hours”. She said that “i]n about 2009 I could not work out why I could not stop”.
(b) Conny McLaughlin said that when she played the pokies she felt like she was “escaping the mundane troubles in my life. I didn't have to think about my life when at a machine. Nothing went through my head while I played except the machine. I didn't have to worry about the husband, kids, work, bills or anything. Going to the pokie venue felt automatic. I just wanted to go all the time. Something in me wanted to go. I didn't think about stopping”.
(c) Robert Ingmire said that “[w]hen playing on the pokies I felt like I was unaware of my surroundings. I felt almost as if I was hypnotised. Playing the machine became my complete focus. Money became meaningless and even the time needed to cash out any winnings felt inconvenient”. Mr Ingmire said that “When I first started playing the pokies I would feel anticipation for a win. This positive feeling soon changed into a negative feeling. I would feel agitated, moody and angry when I had not played. I would be completely preoccupied with going to the pokies and this feeling would only stop when I started playing. At this point I would zone out and go numb”.
(d) Anna Bardsley said that “I soon realised that I was incapable of sticking to a monetary limit when I gambled on poker machines. I always intended to stick to a limit, but was unable to do so”. She said that “At the start of my day I would not have plans to go to a pokies venue but would often find myself at a venue later in the day. I would leave for appointments early to allow myself time to gamble or would attend venues on the way home. I felt that I was almost unable to drive past a signed poker machine venue. I would often make excuses to myself to justify entering venues such as needing to use their bathrooms or wanting a cup of coffee. On these occasions I would always end up using the pokies”. She said that “I was drawn to the lights and sounds the machines emitted and found them to be spellbinding. I would zone out when using the machines. This allowed me some respite from the amount of stress I felt I was under in my personal life. I felt I deserved a break from the stress I felt under”, and “I found the sounds and visuals of the machines soothing. I felt that I was searching for this. I recall that on hearing the jingles they played, I felt special. I felt like I was getting an adrenaline rush upon seeing the lights and sounds of poker machines and would feel agitated if I didn't play the poker machine”. She said “I think that by the time I was hooked, I wasn't thinking properly”.
(e) Libby Mitchell said that “I couldn’t concentrate on dinner conversation because I was too absorbed in wanting to play the pokies. I lost the ability and desire to interact with others. I was gambling between five and seven days a week. By this time my mind was feeling very dislocated and knew I was acting very abnormally for me. That frightened me but I could not stop seeking poker machines. I sought them virtually daily”. She said that “what attracted me to playing the games were the lights and sounds and near misses or ‘almost wins’. I would often hear somebody say ‘Oh how bad was that … just one off’ for example”.
(a) Catherine Sommerville said that “I was concerned about what I was doing, but I couldn’t stop playing. Over the next few months, I used all my disposable money. At the end of the year I sold my car to finance my gambling. I also started pawning my possessions in order to have money for daily living expenses”. She said that “I became absorbed in whatever machine I was playing while I played it. I was mesmerised by the ritual of playing: the images, sounds, lights and anticipation. It felt hypnotic” and that “I didn't get any particular pleasure from playing. I played to fulfil a compulsive imperative”.
(Footnotes omitted).
499 As I have noted, the applicant did not prove, nor did she seek to prove, that any of these lay witnesses were, as individuals, the victims of unconscionable conduct by the respondents. None of the lay witnesses had anything approaching a sufficient relationship with Crown Casino, and the 38 Dolphin Treasure EGMs at the Casino, for proof of an unconscionable conduct case on their individual behalf to be possible.
500 I assume for my next finding, in the applicant’s favour, that each of the lay witnesses could fit into that category, which itself is problematic because some no longer gamble at all, and have not done so for some time. Making that assumption, the evidence which I have set out at [498] can only be assessed as examples of the ways in which a “Vulnerable Player” may have, or may feel they have (not necessarily the same thing, certainly in the opinion of Professors Ladouceur and Nower), impaired control over their gambling behaviour, at least at certain times. Where that leaves the state of the evidence is in the hypothetical: it may or may not be the case, that some people who fit the description of “Vulnerable Players” do, at some times and in some circumstances, have a level (unknown) of impaired control over their gambling activities, and perhaps (but not necessarily) their gambling activities on a Dolphin Treasure EGM and perhaps (but not necessarily) on the machines situated on the floor at Crown Casino.
501 The state of the evidence cannot support any finding of the Vulnerable Players group having a special disadvantage.
502 In any case, as Aristocrat submits in reply, for the applicant to rely on Vulnerable Players having “impaired control” is beyond the applicant’s case as it was initially drawn. The pleaded case concerns “habituated” gamblers, described as those who are “drawn to play the EGM regularly” and “unable to resist the temptation to do so”, and “addicted” gamblers, or those who “play the EGM regularly and will spend his or her resources in doing so even when it is beyond that person’s means to play so regularly,” as well as those vulnerable to becoming so habituated or addicted. The concept of “impaired control” appeared to be used by the applicant in closing submissions in a broader and different way.
503 I have made those finding independently of any authorities. However, as the respondents submit, the authorities support this approach. Crown refers in its submissions to Giles JA’s finding in Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234; 53 NSWLR 43 at [149]:
As the course of the appellant’s gambling shows, at some time a gambler can with assistance or by his own will cease to be a problem gambler, and when a problem gambler there is a range from relatively harmless, albeit undesirable, indulgence, to harmful over indulgence. … Control ultimately rests with the gambler, and society encourages the problem gambler to regain control. …
504 Similar observations were made by the High Court in Kakavas: see [20]-[26]. The fact that Kakavas concerned an individual “high roller” and this proceeding concerns a group of “Vulnerable Players” does not alter the applicability of the approach set out at [20]-[26]. The applicant sought to distinguish Kakavas on the basis that in Kakavas, there was no suggestion that Crown “ran a dishonest game”, and that the transaction had been conducted “honestly”. In contrast, in the present proceeding, the impugned features go to the very structure and rules of the game. I do not consider that has any bearing on whether special disadvantage is established.
505 If that is the state of the law in relation to those who have a demonstrable addiction or problem, this approach must apply with even greater force to a person or persons who are at the stage of being “vulnerable” to an addiction or a problem.
506 There may be less difficulty in applying the concept of special disadvantage to a specific person who meets the criteria for a gambling disorder under DSM-5. I say “may”, because as Crown submits, and Professor Nower observed, with a clinical diagnosis of a behavioural disorder, reasonable clinical minds may differ on whether or not to make a diagnosis. Allowing for that qualification, at least with an identified individual who is in that kind of position, a Court can, through admissible evidence, determine for itself whether a person falls on the “special disadvantage” side of the equitable line, or on the “improvident or reckless” side of the line in engaging in gambling transactions with a service provider like Crown. However, the applicant’s case is not confined in that way, and the applicant adduced no evidence concerning any individual who had such a diagnosis and who had used the Dolphin Treasure EGM at Crown Casino, let alone a person who had been affected by the features relied upon while doing so.
The section 21 claim
None of the impugned conduct has the necessary unconscionable quality
507 In my opinion there are two bases on which the applicant’s unconscionability case under s 21 must fail because she has not established any conduct capable of being characterised as unconscionable in relation to a class of consumers. The first basis is that all of the pleaded conduct has been the subject of regulatory approval under a highly prescriptive scheme that includes assessment of the operation of the EGM for fairness. The second is that her claim remains at a hypothetical level in relation to the class of consumers she has chosen to identify.
508 The “impugned conduct” of Crown is the making available of a Dolphin Treasure EGM at Crown Casino that has five features, being:
(a) the fifth reel has 44 stopping positions as opposed to 30 (“Oversized Reel Feature”);
(b) the distribution of the symbols across the five reels is uneven (“Starved Reel Feature”);
(c) the return to player information as stated;
(d) the “celebratory feedback”; and
(e) the possibility of winning less than the aggregate sum outlaid when placing multiple bets on multiple lines (“Losses Appear as Wins”).
509 The impugned conduct of Aristocrat is alleged to be the manufacture of the Dolphin Treasure EGM with those five features, for (relevantly, although the pleading is impermissibly wider than the rest of the applicant’s case given that the unconscionability case is limited to “Vulnerable Players”) Crown Casino to provide the machine for gambling by members of the public.
510 The applicant relied on the following passage from the reasons for judgment of Allsop CJ in Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; 249 FCR 421 at [57], quoting his Honour’s earlier decision in Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 at [296], where his Honour dealt with the “proper judicial technique” in evaluating statutory unconscionable conduct under the Trade Practices Act. His Honour said that consideration of all the circumstances of the impugned conduct involves:
…an evaluation which must be reasoned and enunciated by reference to the values and norms recognised by the text, structure and context of the legislation, and made against an assessment of all connected circumstances. The evaluation includes a recognition of the deep and abiding requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the central importance of the faithful performance of bargains and promises freely made; the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage; a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon.
511 Throughout his Honour’s reasons in Paciocco, the recurring norms and standards to which the Chief Justice refers are “conscience, justice and fairness”.
512 In Kojic, the Chief Justice continued at [59]:
A provision that proscribes unconscionable conduct is directed to a standard or norm of right behaviour that is less precise. Its assessment requires a body of values against which to make the evaluative judgment of what is right or conscionable in the circumstances, and how far the departure from such should be to warrant the characterisation of unconscionable. The formation of that judgment requires guidance from considerations not part of the direct reference of the immediate language that expresses the standard – but which are the relevant values to bring to bear on the evaluative judgment.
Thus, the standard or norm of unconscionability is more diffuse than the standard or norm embodied in a phrase such as misleading or deceptive, but the former takes its stability from the informing values of the statute and the law, Equity in particular. For instance, in Kakavas v Crown Melbourne Limited (2013) 250 CLR 392, the Court at [161], in speaking of an arm’s length commercial transaction and the operation of the equitable doctrine within s 51AA of the Trade Practices Act, said that a predatory state of mind was required given that the (equitable) principle was concerned with victimisation or exploitation. More directly, the statute (here in s 51AC) sets out considerations that may bear, in any given case, on the evaluation.
513 The respondents did not submit there was any error in principle in what the Chief Justice had said, in either Kojic or Paciocco. Rather, they each submit there was no conduct by either of them that called for the application of these principles. I accept Allsop CJ’s description of the Court’s task. Whether or not there needs to be a degree of “moral taint” (adopting the phrase used by Santamaria JA in Director of Consumer Affairs Victoria v Scully [2013] VSCA 292; 303 ALR 168 at [18] and [48]), I do not need to decide, because I am satisfied on what might be considered an approach that does not require any “moral taint” (see Paciocco at [305] per Allsop CJ) that the applicant cannot make out her claim in any event. In other words, applying a lesser threshold to what the applicant might have to prove, I am not satisfied she can do so.
514 Measuring impugned conduct against such norms and standards must be undertaken, as the Chief Justice emphasised, in the particular context and circumstances in which the allegations arise. Aristocrat referred the Court to the following passage from the Full Court’s reasons in Lux Distributors at [23]:
The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. The content of those values is not solely governed by the legislature, but the legislature may illuminate, elaborate and develop those norms and values by the act of legislating, and thus standard setting.
515 The regulatory framework, which I have set out earlier in these reasons, is not only comprehensive, it contains a number of restrictions which are expressly directed to ensuring that consumers who gamble on EGMs do so in ways which do not involve unfairness, disguise or false encouragement. For instance, the express purpose of each of the Casino Control Act, the Gambling Regulation Act and the National Standard is to ensure that gambling is conducted “honestly” (s 1(a) of the Casino Control Act; s 3.1.1(a) of the Gambling Regulation Act), with considerations of “fairness” (s 3.5.4(a) of the Gambling Regulation Act; paras 1.3.1 and 3.9.57-3.9.59 of the National Standard).
516 In particular, the National Standard describes game fairness as including that the game “must not be designed to give the player a false expectation of better odds by falsely representing any occurrence or event”, that the “display of the result of a game outcome must not be misleading or deceptive to the player (e.g. must not improperly indicate a near-miss)” and “[s]ymbols of virtual reel games (video) must be displayed in the same arrangement as per the reel strips”: see extract at [137] above. The requirements for the provision of “electronic game information” and “electronic player information”, such as the amount of time a gambler has spent on a machine, are also clear examples of regulation directed at ensuring consumers are given information about their gambling and expenditure.
517 That regulatory framework also requires the provision of a considerable amount of information to consumers who gamble on EGMs, information which is designed to inform them about how, in reality, the odds are stacked against them. The clearest example of such regulation is the requirement for Commission-approved brochures, talkers and posters, which must be displayed in particular areas of the casino floor: see [128] above. Such brochures and talkers were in evidence in this proceeding, and were clearly available to gamblers at the Crown Casino floor: see [336(2)(e)] above.
518 There are no allegations that either respondent has failed to comply with its obligations under the regulatory framework. To the contrary, the evidence positively demonstrates compliance.
519 Each of the impugned features forms part of the Dolphin Treasure EGM as approved. Although some of them (e.g. the first two) are not the subject of what can be described as active and express regulation, that is because, as Ms Bryant pointed out in her evidence, these features have never been raised as a concern by any regulator, to her knowledge. The statements on the player information display concerning the RTP are, I have found, likely to cause some initial and temporary confusion, which is likely to be dispelled as soon as a gambler starts betting, or once a gambler seeks further information. The “celebratory feedback” is linked, as the applicant developed her case, to the “losses appear as wins” rather than as an independent source of unfairness or exploitation. Taken together, as Ms Bryant stated in her evidence, (subject to a cap) the sounds associated with a win on the Dolphin Treasure EGM are chosen to align with the length of time an amount won by the player takes to increment on the “win meter” of the Dolphin Treasure EGM. Contrary to being unfair, or deceptive, or exploitative, a correlation such as this – recalling the gambler is sitting in front of the machine watching the increments of any win being added to her or his credits – is a way of allowing a gambler to measure the size of the win – whether or not it is more or less than the bet.
520 Ms Bryant’s evidence about the inevitability of there being what she called “less than bet” wins, and how they are programmed into the Dolphin Treasure EGM was as follows:
111 An invariable consequence of a player playing multiple paylines is that it is possible for a player to win on a single payline with a payout of a smaller number of credits than the number of credits that the player has gambled across the multiple paylines. For example, a player may bet 20 credits to play 20 paylines, and may win a prize of 2 credits for a winning combination that appears on one of those paylines. In such a case, despite having a win on one payline, the player will have 18 credits less after the spin than they had before the spin. In this affidavit, I describe wins such as these as “Less than Bet” wins or “LTB” wins.
112 It is possible for game designers to affect how many LTB wins a player will experience, by the design of the paytable (ie there not being too many winning combinations which pay a prize that is less than the maximum number of paylines that can be played) and by the way in which symbols are organised within a reel strip (ie to increase the likelihood of wins occurring on multiple paylines simultaneously). However, as discussed further from paragraph 114 below, it is also required by the regulations that a game cannot be too “volatile”. A highly volatile game will have larger infrequent prizes whereas a low volatility game will have frequent small prizes. National Standard section 3.9.17 requires that the standard deviation must not exceed 15 when playing just 1 line, and since the reel strips and pay tables do not change when playing multiple lines this will impact the multiline play. This “volatility” limit requires game designers to tend towards including frequent small prizes rather than infrequent larger prizes when designing a game to meet the required theoretical RTP. The inclusion of frequent small prizes naturally results in the occurrence of LTB wins in multiline play.
113 In my experience of game design at Aristocrat, too many LTB wins in a game may make the game less entertaining to play and game designers attempt to avoid this outcome. When I make comments here and elsewhere about what attributes make a game entertaining or not entertaining to play, I make those comments based upon my own experience of playing EGM games and prototypes of games.
521 There was no suggestion in cross-examination that Ms Bryant was dishonest in this evidence. There was no suggestion that Aristocrat had any other motivation in designing the Dolphin Treasure EGM to be a multi-line game with the inevitable consequence that there would be “less than bet” wins, or “losses disguised as wins”, whatever term is used. As Crown also submits, the fact that a gambler is only getting back a sum of money less than she or he has bet is apparent from the information which is required to stay on the screen at all times in front of the gambler. Individuals may choose to ignore the information, or choose to discount the significance that they are losing more than they are betting, but the information is as plainly presented to them as it could be. The applicant submits that “[t]here is no reason why the net loss cannot be recorded beside the ‘win’, nor is there a reason why the fact that sights and sounds will play when an LDW or LTB occurs could not be disclosed to players…” She submits that “there is reason to believe that such disclosure would be of assistance”. First, there is no evidentiary basis to support the submission that there is “reason to believe” these modifications would be of assistance in rectifying any alleged unfairness. Second, even if I were to accept or assume further information of this kind may improve the understanding of some gamblers (how many, one does not know), this does not change the fact that information about the amount bet and the amount won is already displayed to the gambler, and allows the gambler to see easily whether her or his “win” is a net win or a net loss.
522 There is no “concealment” of any of these features from the gambler. Concealment suggests an active decision to hide a matter which should be disclosed. The first two features are not visible, and unlikely to be known to the gambler, but they are also, I have found, not of any significance to the ordinary and reasonable gambler. Nor do they materially alter a gambler’s odds in a way which has any practical significance, or about which any ordinary and reasonable gambler would be concerned. I see no reason that “Vulnerable Players” would bring any different attitudes. Even more so, they are unlikely to be concerned whether their odds are 1 in 41 million, or 1 in 28 million (to take one example). Ms Bryant’s evidence was that Aristocrat
would not build anything into our games that we thought was going to harm people, and…that is a consideration when we’re building our games.
523 She was not challenged on this answer. It was not suggested she was being dishonest, or disingenuous. There was nothing put to Ms Bryant to the effect that those designing the Dolphin Treasure software for Aristocrat (such as herself) were doing so in a way which was intended to practice any deception on or exploit those gamblers who were “Vulnerable Players”, nor was it suggested that in designing this software there was any plan or design to entice gamblers who were Vulnerable Players to behave in ways which were against their interests. The fact these matters were not explored is not determinative, but it is another illustration of how hypothetical the applicant’s case really is.
524 Although the following observations were made in the context of a case about a high roller, and also a cause of action under the unwritten law, the following passage from the reasons in Kakavas at [30] further indicates why there is nothing in the kind of conduct alleged against Crown and Aristocrat in this case which could attract the description of unconscionable, or – if Allsop CJ’s three norms and standards are deployed – against “conscience, justice or fairness”:
It is necessary to be clear that one is not concerned here with a casino operator preying upon a widowed pensioner who is invited to cash her pension cheque at the casino and to gamble with the proceeds. One might sensibly describe that scenario as a case of victimisation. One could also speak sensibly of a gambler, who presents at a casino with the cash necessary to play the game, as a victim of the casino, if there are factors in play other than the occurrence of the outcome that was always on the cards. For example, the gambler may be evidently intoxicated, or adolescent, or senescent, or simply incompetent. But absent additional factors of this nature, it is difficult sensibly to describe the accommodation by an operator of a casino of a patron’s desire to gamble as a case of victimisation. That is especially so in the case of the high roller who has the means, should he or she enjoy a run of luck, to hurt the casino.
(Footnote omitted.)
525 Kakavas may seem, on its facts, a case very far removed from the gambling undertaken by the “Vulnerable Players” identified by the applicant. However, again the vagueness of the class description does not allow that proposition to be stated with absolute confidence: there is nothing in the evidence, nor in the description of the group, which confines it to persons of modest financial means. No doubt such persons would be included, as the lay evidence might suggest, but equally so might gamblers who can afford to lose large sums of money without it impacting their financial situation. This is another example of the absence of any correlation between the impugned conduct and the characteristics of the group said to be affected by it. To this difficulty can be added the findings I have made at [491] to [495] above about the emphasis in the expert evidence of Professors Ladouceur and Nower on the variety of conscious choices made by those with a gambling disorder or with difficulties controlling their gambling. To reach the point of sitting down to use a Dolphin Treasure EGM, a gambler has made a number of choices. Once gambling on that machine, the gambler continues, on the evidence, to make a number of choices, but does so in an environment (both in terms of what appears on the machine and what is available in the casino) where she or he has access to a great deal of information which is capable of minimising or removing any harm caused by her or his choices. The information – both on the EGM itself and as available around the Casino alerts her or him to potential harm that might occur if she or he continues gambling, and to the fact the machine always wins. It provides her or him with access to people to talk to about any difficulties in controlling gambling, or any circumstances in her or his life that are prompting her or him to gamble; and provides her or him with an environment in which there are trained staff whose job it is to identify gamblers with signs suggesting they are having difficulty controlling their gambling. Again, there was no cross-examination to suggest this was some kind of façade, that Crown did not in fact employ such people, or those employees did not perform their job conscientiously and in good faith: Ms Bauer’s evidence was barely challenged at all.
526 On the evidence, and adapting the language from Kakavas, Crown does more than simply “accommodate” a gambler’s choice to gamble: it is required by law to, and does, alert her or him to the potential for harm, to ways to of avoiding it, and to where she or he can seek help if needed.
527 Finally, the applicant referred only selectively to the considerations set out in s 22 of the ACL, although there is authority to the effect that it is necessary for the Court to examine all the factors in s 22 as part of the circumstances of the allegedly unconscionable conduct: see Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28; 258 CLR 525 at [189] (Gageler J) (which concerned a similar provision under the Australian Securities and Investments Commission Act 2001 (Cth)); and Colin R Price & Associates v Four Oaks Pty Ltd [2017] FCAFC 75; 349 ALR 100 at [58] (which concerned s 51AC of the Trade Practices Act, the predecessor to s 22). Any examination of the factors set out in s 22 demonstrates that none of them could be decided adversely to the respondents on the evidence. Many are not applicable, but in part this is because the impugned conduct on the part of Crown and Aristocrat is passive in relation to the alleged “Vulnerable Players”, other than the ordinary and lawful conduct of their businesses. There is no active conduct on the part of either respondent that treats the alleged “Vulnerable Players” any differently from the first time gambler, or the regular gambler who has no difficulty controlling her or his gambling activities.
528 Second, the applicant’s case is that the unconscionable conduct of both respondents occurred in relation to gambling on Dolphin Treasure EGMs at Crown Casino. While the narrowness of that case did not substantially affect how the s 18 claim could be put, it does substantially affect how the s 21 case can be put. This is not to gainsay the point made by the applicant that s 21 is intended to be capable of applying “whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour”. That aspect of s 21 does not relieve an applicant from proving that the impugned conduct was of the required character in relation to an actual group of people: that is, proving here that some people were (and are being) exploited, or unconscientiously taken advantage of, in their gambling on the Dolphin Treasure EGMs at Crown Casino, in the circumstances alleged, and that such circumstances amounted to a “system of conduct” or “pattern of behaviour”. For the reasons I have set out elsewhere, the applicant’s evidence does not establish this to any material degree. The alleged unconscionability remains hypothetical. So too do the alleged circumstances of the contravention.
Rejection of Aristocrat’s separate submission under s 21
529 Aristocrat makes a separate submission on the s 21 case. Relying on the decision of a Full Court of this Court in Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 at [114]-[117] (Heerey J, with whom Black CJ and Tamberlin J agreed), concerning the predecessor s 51AC of the Trade Practices Act, Aristocrat submits that s 21 concerns the relationship between suppliers of goods and services and consumers of those goods and services. It submits that the “Vulnerable Players” group members are third parties to the supply of EGMs and game software by Aristocrat to Crown and s 21 therefore has no application to Aristocrat’s conduct in supplying the EGMs to Crown.
530 I do not accept this argument. I consider Aristocrat’s conduct in supplying the EGMs to Crown, on the evidence, is capable of constituting conduct “in connection with” the supply of gambling services by Crown to members of the public, as the consumers. Especially so where it is Aristocrat which designs the Dolphin Treasure software, installs it into the EGM and configures it (including specifically to synchronise with Crown’s systems), and carries out and submits the EGM and the gambling program for initial testing and approval by the regulator. It is Aristocrat which is responsible for all of the features of the Dolphin Treasure EGM: as Crown submits, although it may request some modifications and specifications, by and large it receives the Dolphin Treasure EGM as Aristocrat manufactures and configures it. It is plain on the evidence that Aristocrat knows and intends that the “end user”, or consumer, of its product is the gambling public. If, contrary to the evidence in this case and contrary to my findings, there was a feature of an EGM such as a Dolphin Treasure that was designed to entice gamblers to continue betting by engendering a false expectation in them (such as a “true” near miss feature, as envisioned by para 3.9.57a of the National Standard, which is prohibited), then I would not accept Aristocrat could escape liability under s 21 on the basis of the principles in Monroe Topple. Members of the gambling public are the direct end users of the products designed by Aristocrat, although those products are made available for gambling by Crown. Aristocrat knows and intends its products to be used by members of the gambling public: Ms Bryant’s evidence as a whole amply demonstrates it is the gambling public that Aristocrat’s employees have in mind when designing software and hardware for EGMs, including the Dolphin Treasure.
The introduction of near misses into the ss 20 and 21 cases
531 To a greater extent than in the s 18 case, in her final closing submissions (in writing and orally), the applicant sought to rely on the concept of near misses, and the considerable literature surrounding their effect on people’s willingness to continue gambling.
532 The applicant now contends:
274. According to the Productivity Commission, “[a] near miss is an outcome on an EGM that is very close to the desired or winning combination (for example, having all but one winning symbols in a row, or winning symbols appearing on a line that has not been bet upon)”. This definition is consistent with the definition given by Professor Ladouceur during cross-examination:
The way it is usually defined in the literature, saying that there few symbols align which would lead to a winning sequence. And one of them is missing as a real win. So there’s one or two depending how you define that is missing. Compared to – let’s say you need five symbols and you got three or four, you – a near miss would be three or four compared to five totally irrelevant symbols that will appear on the screen.
275. This definition is also consistent with the literature.
276. The Oversized Reel Feature and the Starved Reel Feature, individually and in combination, enhance the prospects of a player coming very close, but just missing out, on a winning combination across the five reels. The misleading aspects of those features are outlined in the s 18 case discussed earlier in this submission.
277. Accordingly, the Court should find that these features effect what the literature would recognise as a “near miss”. In any event as outlined earlier in relation to the s 18 case, they distort the players’ impressions as to the probabilities of winning.
278. Near misses are problematic because they encourage players to continue playing. The Productivity Commission said that “[n]ear misses have long been thought to induce players into believing that they have just missed a prize and that a win must be imminent, and is seen as encouraging continued play”. The Productivity Commission indicated that there were limited studies on this issue, but it ultimately said that “to the extent that such misperceptions do affect the intensity or duration of play, the Commission’s proposals in this report should help minimise any resultant harm”.
(Footnotes omitted).
533 There is then a number of pages devoted to working through answers given by Professors Ladouceur and Nower in cross-examination on the topic of near misses, together with substantial extracts from a series of journal articles on the topic.
534 In the alternative, at the end of this part of her submissions, the applicant contends:
Even if contrary to our submission the larger fifth reel and the unequal distribution of symbols is not equated with the near miss examples discussed in the literature, the cognitive distortion they create as to the probability of winning (outlined in the s 18 case), should be found to lead to substantially the same conclusions.
535 There is no allegation in the pleadings that the Oversized Reel Feature and the Starved Reel Feature effect a “near miss”. Indeed, the term “near miss” is not used in the pleadings at all. Nor is there any allegation that these two features create a cognitive distortion of a kind that leads to the same result in a gambler.
536 Unsurprisingly, there was vigorous objection by both respondents about the new turn taken by the applicant in closing submissions. No leave was sought to refine or further develop the applicant’s pleadings to include these allegations about near misses. I have not considered them in reaching my conclusions.
Conclusions on the applicant’s causes of action
537 I have concluded that none of the applicant’s causes of action are made out. In relation to the s 18 allegations, I find that the Equal Reel Size and the Equal Symbol Distribution representations are not made out. Although I have found the Risk representation is made, I find that at most, it gives rise to some initial confusion or misapprehension. The making of that representation does not constitute to misleading or deceptive conduct within the terms of s 18 because any initial impression or misapprehension would be dispelled once a gambler starts using the EGM, and or alternatively looks at further information available in the form of brochures on the casino floor.
538 In relation to the ss 20 and 21 allegations, neither of these are made out, because on the evidence the conduct of Crown or Aristocrat cannot be characterised as unconscionable, whether in the meaning of the unwritten law or under s 21. Further, her claim remains at a hypothetical level in relation to the class of consumers she has chosen to identify.
What is not decided
The interrelationship between the ACL and the regulatory scheme in relation to gambling
539 Subject to my findings at [515]-[519] above, it has not been necessary for me to consider the respondents’ submissions about the effects of the detailed regulatory and legislative scheme in Victoria governing the provision of EGMs, including the Dolphin Treasure, to the gambling public. If I had found the alleged representations were made, and were misleading or deceptive, or there was conduct capable of being characterised as unconscionable for the purposes of s 20 or s 21 of the ACL, or both, then it would have been necessary to consider in some detail the interrelationship between the regulatory scheme and the ACL before finally determining whether there were contraventions of those provisions. For example, in relation to the Risk representation, Ms Bryant gave evidence that, in deciding whether to approve a machine or not (or approve a new version) the regulator would be unlikely to accept any departure from the wording suggested in the National Standard about the RTP. As I have found, that wording contains the same text as the Risk representation on the Dolphin Treasure EGM. Whether these sorts of matters go only to relief rather than contravention would have been one of the complex issues to be determined. Findings of contravention would have also brought into sharp focus Crown’s submissions about s 131C. As it stands, I do not need to deal with Crown’s submissions about s 131C.
540 Although there may be other circumstances where the existence of a regulatory scheme governing conduct of a person subject to the terms of ss 18, 20 and 21 of the ACL will not prevent findings of contravention (see for instance, cases involving real estate: Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd [2016] FCA 1184; Director of Consumer Affairs Victoria v Manningham Property Group Pty Ltd [2017] FCA 1448; or cases involving legal practitioners: Australian Competition and Consumer Commission v Sampson [2011] FCA 1165; Nixon v Slater & Gordon [2000] FCA 531), in those circumstances, the impugned conduct could be said to be either implicitly prohibited by the regulatory scheme (such as underquoting on estimates for sale prices) or simply not dealt with at all by the scheme. Further, taking the real estate cases as an example, the level of prescription in the regulatory scheme is, relevantly, less. A good example of the specific nature of the overlap is the content and operation of V9.1.1 of the Victorian Appendix, which I have set out at [140] above. That requires an assessor to be satisfied, amongst other things, that the artwork on an EGM is not misleading or deceptive. Whether what appears on the screens through the “Even Reel Image” and the Dispersed Symbols Image” is artwork would have been another issue, but the potential for inconsistency as between the operation of approvals under the Victorian Appendix and the ACL is clear. The same is true of para 3.9.57 and 3.9.57a of the National Standard, which deal with “fairness”. No doubt there are arguments about the construction of these standards which may mean they do not engage with the applicant’s arguments, but all this highlights why the Court should not embark on any determination of all of these matters until a proceeding requires that to be done.
541 It would have been an issue of some complexity to determine, where a regulatory approval scheme explicitly incorporates concepts such as fairness to the users of EGMs, how a contravention of ss 18, 20 or 21 could avoid cutting across regulatory and policy choices. Perhaps that is a potential inconsistency which is simply a consequence of the operation of the ACL, perhaps not. These matters can be left for a proceeding in which they must be determined.
The role of cognitive factors in gambling disorders and in those with difficulty controlling their gambling
542 I have not made any final findings on the applicant’s contention that there is “a cognitive aspect to disordered, problem, irresponsible or excessive gambling”. I have, at points in these reasons, assumed that proposition in the applicant’s favour (for example in examining the attributes of Vulnerable Players), because it is clear from the evidence of Professors Ladouceur and Nower that at least at a theoretical level, each of them is prepared to accept that while the causes of gambling disorder (and, it would seem, other behavioural difficulties people experience with controlling their gambling) are “multifactorial”, cognitive factors play some (presently unquantified) role.
543 For example, Professor Ladouceur gave the following evidence in cross-examination:
Again, it’s – the cognitive factors, they play a key role. And again, I would like just to make sure that you don’t interpret my answer that this is the only factor. It’s one of the many factors”.
544 And Professor Nower said:
I tend to not be as focused on just the cognitive aspects. So I’m much more multifactorial. So I do think the cognitive – these cognitive things are – are important, but I also think a number of other things are important. So I have a more of a – a bit of a more holistic viewpoint.
545 For reasons I have set out earlier, I have not had regard to the evidence of Professor Yücel. Dr Deighton’s evidence was consistent with the views of Professors Ladouceur and Nower, although it went further. However, given the other conclusions I have reached, there is no occasion to go further.
The “contribution” of the identified features of the Dolphin Treasure EGM to the development or persistence of gambling disorder, or difficulties in controlling gambling activity
546 I use the term “contribution” here, in a causal sense, because causation was a central issue in the applicant’s unconscionability case.
547 I have found the applicant has not proven any unconscionability in the impugned conduct of either of the respondents. Although on one view it might be said such a finding cannot be made without an anterior finding whether there is a causal or contributory relationship between the features of the Dolphin Treasure EGM and the development of gambling disorder, or development of difficulties in controlling gambling activity, I consider the approach I have taken is open, given the particular way the applicant has framed her case and given the very particular regulatory circumstances in which the respondents’ conduct occurs.
548 I have found there is no allegation, or proof, of an individual who has been the victim of unconscionable conduct within the meaning of the unwritten law, so the threshold requirement is not met. The applicant has also failed to establish any special disadvantage, another threshold requirement that is not met. The causal issue is not reached on the s 20 case.
549 I have also found the respondents’ impugned conduct is not unconscionable because, judged against the social context and normative standards, including the regulatory framework, the conduct simply cannot be characterised in that way. The s 21 allegations never engage beyond the hypothetical level, because the “Vulnerable Players” remain an abstract group, with no individual characteristics against which the impact of the respondents’ conduct can be assessed in a tangible way through the evidence. Therefore, the question of how the impugned features of the Dolphin Treasure EGM may or may not affect the cognitive functioning of “Vulnerable Players” cannot lead in this proceeding to a conclusion of a contravention of s 21.
550 Whether there is a casual connection of any kind between features of an EGM machine such as the Dolphin Treasure (and whether those features identified in this case, or other features) and the development or persistence of gambling disorder, or difficulties in controlling gambling activity, is an important question of some moment well beyond the confines of this case. Unless it is necessary to decide it, I do not consider it appropriate I do so.
Accessorial liability of Aristocrat
551 It is also not necessary to decide the question of any accessorial liability of Aristocrat for the alleged contraventions by Crown of ss 18, 20 and 21. There was no claim of accessorial liability against Crown for the conduct of Aristocrat.
Implications of findings of contravention
552 Given the applicant’s allegations have not been upheld and no substantive relief will be granted, I do not need to express any opinion on the submissions made by the respondents that the commonness of the features of the Dolphin Treasure EGM mean that this proceeding has implications beyond the Dolphin Treasure EGM, and that “every venue which made available EGMs in Victoria with any similar features, completely unaware of how the game software determined the probabilities of a win… would be making the representation themselves in contravention of the ACL.”
Appropriate relief
553 Nor do I need to express any view on the appropriateness of the relief sought by the applicant, and what view I may have reached about the relief sought, had I upheld the claim. The applicant’s contention (outlined in opening and closing submissions) is that Crown and Aristocrat need to make appropriate statements available to the gambling public on the machines which counteract the misleading visual impression. The applicant accepts that success in her arguments could mean that the Dolphin Treasure EGM machines should not have been approved, or should not continue to have approval under the Gambling Regulation Act because they do not satisfy the fairness requirements. The applicant also accepts that the outcome of her claim being successful is that the Court would restrain the use of an EGM by Crown at its Casino notwithstanding that use had been approved by the Victorian authorities. There are complex and difficult questions raised by relief which has these effects. Those questions should be resolved in a proceeding where it is necessary to do so.
Orders and costs
554 On the basis of my conclusions, the appropriate order is that the application be dismissed. There may be merit in some examination by the Commission of the current regulations, and terms of the National Standard which deal with the purpose and text of any notification to gamblers about the RTP, including the example given for the player information display. I note of course, that this proceeding only considers the previous version of the National Standard and Victorian Appendix, and not the recent 2016 and 2017 version: see [129] above.
555 I also note that, given that I have found that the information about the theoretical RTP, as provided by the player information display of the Dolphin Treasure EGM, may be confusing to players, it may be that Crown and/or Aristocrat should consider amending the wording on the screen, or providing more information on the talkers. As para 1.3.2(a) of the National Standard indicates, the Standard (and therefore the sample player information display in the Standard) is not intended to impose a single solution or method of realising an objective, including the Standard’s fairness objectives. The 2016 National Standard contains a similar statement: namely, that it is not drafted so as to limit or encourage any particular technology or implementation: para 1.8.
556 The parties will be given an opportunity to propose orders reflecting my reasons on the s 37AF application above.
557 The parties will also be given an opportunity to make submissions on costs, including whether there should be an order for lump sum costs.
|
I certify that the preceding five hundred and fifty-seven (557) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. |
Associate:
