The impressions and expectations of a hypothetical person, who is exposed to an alleged representation, may be critical to a case of misleading or deceptive conduct.

Poker machines still stir controversy decades after their introduction, but have also generated an interesting decision on section 18 of the Australian Consumer Law.

In 2014, Shonica Guy commenced court proceedings alleging that Aristocrat Technologies Australia Pty Ltd and Crown Melbourne Limited had breached section 18 of the Australian Consumer Law by making a particular poker machine called Dolphin Treasure available to players at Melbourne’s Crown Casino[1]. As we all know, section 18 prohibits conduct that is misleading or deceptive or likely to mislead or deceive. On 2 February 2018, Justice Mortimer of the Federal Court dismissed Ms Guy’s allegations (Guy v Crown Melbourne Limited (No 2) [2018] FCA 36).

This case is significant because it illustrates how the impressions and expectations of a hypothetical person are important to the success or failure of a claim under section 18.

Dolphin Treasure

The Dolphin Treasure poker machine provided a computerised simulation of a game that was previously available on old-fashioned mechanical slot machines. The game consisted of five spinning reels where a player wins by aligning symbols displayed on the reels. Like all poker machines these days, Dolphin Treasure was fully computerised, so the spinning reels were just images on a computer screen.

There were 30 stopping positions on the first four reels of Dolphin Treasure and 44 on the fifth. Each stopping position displayed one of 13 symbols. The stopping positions were determined by a random number generator and the symbols were not evenly distributed across each of the reels.

Dolphin Treasure was required by government regulations to provide certain information to players at the push of a button. This included the “Total Theoretical Return to Player” (RTP). The RTP was “the percentage of the total amount wagered that would be returned to players over the cycle of the game”. In Victoria, the RTP was required to be at least 87%. The “cycle of the game” for Dolphin Treasure was 35,640,000 plays, being the number of symbols on each reel multiplied (ie 30x30x30x30x44).

Three alleged misrepresentations

Ms Guy alleged that Crown made three representations by making Dolphin Treasure available for players, and that Aristocrat also made these representations by manufacturing the machines and supplying them to Crown:

  • The “Equal Reel Size representation”: the five reels are of equal size with each reel having the same number of symbols.
  • The “Equal Symbol Distribution representation”: the number of each of the symbols “is as evenly distributed as possible across the five reels”.
  • The “Risk representation”: displaying the RTP to players represented that a player will retain at least 87% of “the total money he or she wagers in any one session of play”.

In support of the first two representations, Ms Guy referred to three features of Dolphin Treasure:

  • the reels appear to spin at the same rate;
  • the reels “tick” like those in an old-fashioned mechanical slot machine; and
  • when the reels stop, three symbols will be visible for each reel (with the symbol relevant to determining a winning combination in the middle), but each of the three visible symbols will always be different.

Crown and Aristocrat denied the allegations on several grounds including that the three representations were not actually made.

A trip to the pokies

A case of this kind was bound to throw up something unusual, but you probably weren’t expecting the judge and lawyers to visit Crown Casino as part of the trial. Well, that’s precisely what happened. On a Wednesday afternoon, Justice Mortimer and junior counsel for the parties attended Crown Casino. Her Honour was provided with a $200 credit ticket by Crown, which was returned to Crown after the trip, and “used the [Dolphin Treasure] machine … placing various bets.” This may seem odd, but it was an important part of assessing Ms Guy’s claim. Ms Guy did not present evidence that anyone who played Dolphin Treasure was actually misled. Her case was entirely based on the Court inferring that a hypothetical player would interpret the features of Dolphin Treasure in such a way that the representations were made. “In large part”, Ms Guy relied on the Court drawing inferences from videos of Dolphin Treasure and what it observed during the trip to Crown Casino.

So was Dolphin Treasure misleading?

Justice Mortimer concluded that neither of the “Equal Reel Size representation” or the “Equal Symbol Distribution representation” were made, saying there was no evidence that any player had formed these impressions of Dolphin Treasure. Justice Mortimer also noted the following points:

  • “It is not a natural or expected consequence of the features [of Dolphin Treasure]… 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.”
  • A hypothetical gambler would not realise that no symbol appeared more than once among the three symbols that were visible on each reel when the reels came to rest.Even if they did, this could not “lead the hypothetical gambler to any particular belief about how many stopping points were on each reel.”

Justice Mortimer concluded that the “Risk representation” had been made, but it was not misleading or deceptive. A gambler was “likely to believe, at least momentarily” that the RTP shown on the screen of Dolphin Treasure “is directed at his or her individual chances of winning on the machine”, but that belief “will be more or less immediately dispelled by the random outcomes as the gambler makes bets, and experiences losses and wins”. Conduct that “engendered only confusion and wonderment” does not contravene section 18. It must go further and have “a tendency to lead into error”. In this case, there may have been “some fleeting confusion, but nothing more.”

Impressions and expectations

Ms Guy’s case shows that the impressions and expectations of a hypothetical person, who is exposed to an alleged representation, may be critical to a case of misleading or deceptive conduct. Justice Mortimer was not prepared to infer that a hypothetical gambler would form a certain impression from the visible features of a poker machine or expect it to operate in a certain way. For that reason, Ms Guy’s case failed.