Ladbrokes Digital Australia Pty Ltd v Liquor & Gaming NSW - Case Note
On 20 February 2019, the Criminal Court of Appeal of New South Wales (the Court) handed down a decision in favour of Ladbrokes, finding that a series of gambling advertisements relating to Ladbrokes’ Odds Boost products were not an inducement to customers in New South Wales to participate in gambling activity in breach of the Betting & Racing Regulation 2012 (NSW) (the Regulation).
The Court’s decision rejected a broad interpretation given by the NSW regulator to the scope of “inducement” in the prohibition on inducements in gambling advertising being promoted to persons in New South Wales. This provides guidance on the application of New South Wales law to gambling advertising by clarifying the type of advertising that constitutes an inducement to participate in gambling activity.
In 2017, Ladbrokes ran a series of advertisements relating to its Odds Boost and Odds Boost Extra Racing features (collectively, Odds Boost Products).
The Odds Boost Products
The Odds Boost feature allowed a Ladbrokes customer who was betting on a particular horse, greyhound or harness race to obtain odds for a specific horse, which were more favourable than the odds the customer would otherwise have been able to obtain from Ladbrokes. This feature was available to Ladbrokes customers only once per day.
The Odds Boost Extra Racing feature allowed a Ladbrokes customer to obtain odds relating to a pre-selected racing event that was more favourable than the odds the customer would otherwise have obtained from Ladbrokes. This feature was available to Ladbrokes customers only once per event, but could be available on multiple events per day (at the discretion of Ladbrokes),
The Odds Boost Products were only available if a customer had a Ladbrokes betting account, manually selected the “Odds Boost” button on the Ladbrokes betslip and subsequently placed a bet at the odds available through the Odds Boost Products.
New South Wales Prosecution
The New South Wales gambling regulator, Liquor and Gaming NSW (LGNSW), reached the view that the advertising by Ladbrokes of its Odds Boost Products offered an inducement for customers in New South Wales to participate in gambling activity. Subsequently, a prosecution was issued against Ladbrokes for publishing advertising in breach of clause 12(1)(h) of the Regulation.
Clause 12(1)(h) of the Regulation prohibited a licensed wagering operator from publishing in New South Wales any gambling advertisement that offers customers in New South Wales an inducement to participate, or to participate frequently, in any gambling activity. In policy guidance, LGNSW indicated that an advertisement constitutes an offer of an inducement if it had the capacity to encourage a person to participate in a gambling activity (subject to exclusions).
The Court's Decision
The key issue for consideration by the Court was whether Ladbrokes, in publishing advertisements relating to its Odds Boost Products, offered to customers in New South Wales an inducement to participate in gambling activity in breach of clause 12(1)(h) of the Regulation.
In considering whether Ladbrokes was in breach, the Court sought to determine whether the Odds Boost Products itself constituted an inducement to participate in gambling activity.
In submissions made by LGNSW, it was argued that any feature of a gambling product that was held out as an advantage arising from participating in gambling activity constituted an inducement. As such, LGNSW submitted that the Ladbrokes’ Odds Boost Products, offered on top of ordinarily available odds, were an inducement which Ladbrokes advertised to influence individuals to open a betting account.
Ladbrokes, in response, made submissions to the effect that an inducement must be something extraneous to the product (that is, the opportunity to participate in gambling activity). Ladbrokes argued that the Odds Boost Products were an integral part of Ladbrokes’ gambling product offering and, as such, did not constitute an inducement.
The Court sought to distinguish the nature and characteristics of:
- A provision of a gambling product that induced customers to participate in gambling; and
- A promotion of an inducement (which promoted something external to the gambling product).
The Court held that it was only the latter type of inducement which was intended to be prohibited by the Regulation. As such, the Court held that, for the prohibition to be contravened, some departure is both warranted and necessary from the ordinary and natural meaning of “offers” and “inducement”.
Accordingly, the Court held that the Odds Boost Products did not comprise an inducement to participate in gambling activity and, therefore, that Ladbrokes was not in breach of the Regulation. In accepting Ladbrokes’ submissions, the Court held that, if LGNSW’s submission were correct, every advertisement of a gambling activity would constitute an inducement to participate in a gambling activity.
Importantly, the Court emphasised that licensed wagering operators are permitted to advertise products and services under New South Wales law. Accordingly, for the restriction on the advertising of gambling products in clause 12(1)(h) of the Regulation to apply, the advertising must address something additional to the gambling product itself.
The implications of this decision are far-reaching, as the determination clarifies that licensed wagering operators are entitled to promote their products and services, and that mere promotion of a gambling product does not constitute promotion of an inducement. Potentially, this decision will be influential in the manner in which gambling advertising restrictions relating to inducements in all Australian States and Territories are reflected in legislation that is introduced to implement the National Consumer Protection Framework (due to be completed by 26 May 2019).1
Indeed, we anticipate that some States and/or Territories will draft in their legislation provisions which reflect clearly the policy objective behind gambling advertising restrictions, namely to restrict their attraction. In this regard, we will monitor the manner in which the legislation reflects a balance between licensed wagering operators being entitled to promote lawfully their services (which is one of the benefits of a wagering licensing regime), and the protection of consumers from the harm associated with that advertising.