Guy v Crown Melbourne Limited (No 2) [2018] FCA 36: Gambling and Unconscionable Conduct

Tuesday 6 February 2018 @ 12.18 p.m. | Legal Research | Trade & Commerce

On 2 February 2018, the Federal Court of Australia in Victoria handed down its judgement in the landmark case  of Guy v Crown Melbourne Ltd (No 2) [2018] FCA 36. The Court found in favour of Crown Melbourne Ltd (‘the respondent’), finding that the specific machine used by the respondent complied with regulations and was not the result of unconscionable conduct, thus clearing the respondent of any wrongdoing.

Facts

The applicant, Shonica Guy, has suffered from gambling addiction for 14 years. She sought a declaration that the Dolphin Treasure gambling machine was designed to be addictive and produce uneven results.  The legal action focussed on the uneven spread of symbols needed to win across the five reels central to the game, giving players a sense that they were winning when in reality they were losing money, as well as alleging that the 'return to player' (RTP) statements issued by the machine were confusing.

Legislative Background

The applicant's action focussed in particular on the Competition and Consumer Act 2010 (Cth) section 21:

(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.

Decision of the Court

Justice Mortimer, sitting alone, found that while the RTP statements on the machines may be confusing to the ordinary gambler, it would only cause a fleeting impression on the player:

“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. 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.” [430]-[431]

She further found that the applicant did not prove any unconscionability in the conduct of the respondent, especially given the particular way the applicant framed her claim, and with regard to the fact that there was no proof of a particular individual or group of individuals who have been the victim of such alleged unconscionable conduct:

“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.” [549]

Response to Decision

Dr Charles Livingstone, professor of public health at Monash University, predicted that this was the first of many similar actions regarding gambling regulation. He said:

“This, to me, is like the beginning of the issues around tobacco control. It took 50 years or so, through a series of court cases and other actions for the harms of tobacco to be properly addressed, and I think this will be the first of what will be many decisions made by the courts that will reflect on this.” 

The manufacturer of the Dolphin Treasure machines, Aristocrat Leisure, who was the second respondent in the matter, said in a statement released to the stock market:

“As we have said throughout, Aristocrat is a high-integrity business that takes our regulatory obligations extremely seriously. We strive to scrupulously uphold our obligations with respect to EGM [electronic gaming machine] compliance.” 

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

Guy v Crown Melbourne Limited (No 2) [2018] FCA 36

Competition and Consumer Act 2010 (Cth) available on TimeBase's LawOne service.

Richard Willingham, ‘Crown casino, Aristocrat face lawsuit alleging deceptive conduct over poker machines,’ (The Age), 6 September 2016.

Nick Toscano, ‘Former gambling addict loses landmark poker machine case against Crown, Aristocrat,’ (The Sydney Morning Herald), 2 February 2018.

Media Release: ‘Aristocrat Welcomes Federal Court Judgment In Guy Litigation.’

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