Welcome to the June 2015 Addisons’ Gambling Law & Regulation Newsletter.
There have been numerous developments in the gambling space since our last Newsletter. These developments are varied and relate to, for example, litigation proceedings involving two of Australia's largest gambling industry operators, the monitoring of gaming machines, product fees imposed on wagering operators and the development of new casinos.
Additionally, we cover in detail a variety of issues that will be of interest to our readers.
- Last month, the Federal Government passed legislation that would cause Norfolk Island to become a municipality of New South Wales. The Federal Government has since abolished the Norfolk Island Legislative Assembly.
As a result of these changes, which were foreshadowed by the Federal Government last year, Norfolk Island is no longer able to self-govern.
These developments are of particular interest to Australian gambling operators, given that the Norfolk Island Gaming Authority (the Authority) has numerous wagering licensees, including Ladbrokes.
In April 2015, we discussed these changes with Rod McAlpine, Director of the Authority. At the time of the interview, there was a significant lack of clarity around the impact of the changes on the Authority and its licensees. Despite the passing of legislation since the interview and the abolition of the Legislative Assembly, this lack of clarity remains at the date this Newsletter was finalised.
We will continue to monitor these changes.
- Gambling operators and many of their customers alike have a vested interest in the extent to which an operator owes problem gamblers a duty of care. A 2014 decision of the Supreme Court of British Columbia is consistent with recent Australian decisions on the same issue. The most well-known of these cases is the decision of the High Court of Australia in Kakavas v Crown Melbourne Limited. These decisions collectively suggest that, under Australian law (and under Canadian law), operators do not owe a duty of care to problem gamblers to prevent them from suffering gambling loss. However, there always remains a possibility that a duty of care may exist. This will depend on the relevant facts under consideration.
- Foreign gambling operators sometimes overlook the importance of considering how Australian law applies to their business when dealing with Australian customers. There is a common misconception that, because foreign gambling operators are not located in Australia, they are not subject to Australian law. However, these operators should be aware that:
- if Australian legislation has extraterritorial effect, it will apply outside Australia; and
- various enforcement mechanisms are available to Australian gambling regulators and law enforcement bodies to enforce any Australian law that applies extraterritorially against an entity located outside Australia.
- In South Australia, you may not even need to supply gambling services to fall on the wrong side of the law. One of the South Australian Government’s most recent proposals is to introduce restrictions on the sale and promotion of toys with gambling characteristics, such as elements of risk and chance, which are analogous to gambling services. For example, a toy bingo set may be caught by these restrictions. This proposal was foreshadowed by the South Australian Government’s “gambling starts with games” campaign which seeks to “reduce the exposure of young South Australians to gambling like games.”
- Operators seeking to target the Australian market are often also interested in the New Zealand market, where the wagering law is currently under review.
For further details, please see ‘New Zealand – Review of Offshore Online Betting Regulation’.
As foreshowed above, there have been many other issues that are of interest to gambling operators in the Australian market. For example:
- The High Court has granted leave recently to each of the State of Victoria and Tabcorp Holdings Limited (Tabcorp) respectively for a hearing to take place in respect of appeals against the decisions of the Supreme Court of Victoria (Court of Appeal) relating to claims arising from the Victorian Government’s decision to change the regulatory structure relating to gaming machine licensing in Victoria.1
Among the changes effected was the replacement of the duopoly held by Tatts Group Limited (Tatts) and Tabcorp relating to the supply and operation of gaming machines with arrangements under which venues would hold operating licences directly. At the same time, it was announced that neither Tabcorp nor Tatts would be entitled to any compensation arising from the expiration of their licences in 2012.
The State of Victoria has appealed the decision of the Court of Appeal that Tatts should recover $500 million from the Victorian Government.
Tabcorp has appealed the seemingly contradictory decision of the Court Appeal that it is not entitled to recover $650 million from the Victorian Government.
We will monitor the outcome of developments in these proceedings in the High Court.
- Recently, the gambling regulator in New South Wales released information relating to the tender process for the licence to operate the monitoring of the 9,500 electronic gaming machines in New South Wales. The current licence is due to expire in November 2016 and is held by a subsidiary of Tatts. Unlike some of the other developments discussed in this article, this call for tenders has received limited attention from the mainstream press.
- The National Rugby League has become the first Australian sports controlling body to levy a product fee based on turnover. This was announced recently in press articles relating to the 2015 version of the NRL’s product fee and integrity agreement. A product fee applied on turnover is charged commonly by racing bodies in connection with the use of race fields; however, until the NRL’s 2015 agreement, Australian sporting bodies all charged product fees based on gross revenue.
- Crown Resorts’ construction of a new VIP only ‘gaming facility’ at Barangaroo in the Sydney CBD continues to be the subject of media attention. Most recently, modifications to the plans for the proposals have been the subject of high profile objections. We will continue to monitor the developments relating to the proposed casinos in Sydney, Brisbane, Cairns and the Gold Coast.2
- The voluntary pre commitment policy relating to the use of gaming machines in Victoria goes live in December 2015. The Victorian government has decided to pursue this policy notwithstanding the decision by the current Federal Government not to pursue the mandatory pre commitment system policy proposed by the previous Federal Government.
- Also in Victoria, the Department of Justice and Regulation in that state released earlier this year, as part of its “Lotteries Licensing Project”, a paper asking for submissions in relation to the Victorian lottery licensing regime. Submissions were due in May. It will be interesting to see the outcome of this process and whether it will include any changes to the licensing of lotteries in that state.