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Home > Blog > Blog: The poker machine case: Guy v Crown Melbourne Limited (No. 2) [2018] FCA 36

The poker machine case: Guy v Crown Melbourne Limited (No. 2) [2018] FCA 36

4th Apr 2019

In 2012, it was reported that Australians spend nearly $20 billion each year on gambling and most is poured into the country’s 200,000 poker machines. For each addicted gambler, up to ten more are seriously affected.[1]

Despite the way problem gamblers are often portrayed, for some, avoiding gambling is not just about being able to develop more self-control.

‘Addiction professionals and the public are recognising that certain non-substance behaviours – such as gambling, internet use, video-game playing, sex, eating, and shopping – bear resemblance to alcohol and drug dependence. Growing evidence suggests that these behaviours warrant consideration as non-substance or “behavioural” addictions and has led to the newly introduced diagnostic category “Substance-Related and Addictive Disorders” in DSM5.'[2]

‘Gambling disorder’ has been placed in the above DSM5 category.

It is now understood that the experience of gambling can be associated with multiple neurotransmitter systems including serotonergic, noradrenergic, dopaminergic, opioidergic, and glutamatergic transmitters. The nature of poker machines, with their colours, lights and noises, stimulates the brain in a way that keeps vulnerable gamblers coming back.[3]

In Australia, pokies must have a payout percentage of 87 per cent or higher, although the gambler does not know the actual setting. Statistically, the longer a person plays the more they are likely to lose. There is no way to consistently win on the pokies.[4]

Given the large sums of money involved, it is not surprising that the beneficiaries of the profits will fight hard to protect their revenue stream. So it played out in Guy v Crown Melbourne Limited.

Legal framework

In 2011 the Trade Practices Act 1974 (Cth) became the Competition and Consumer Act 2010 (Cth) (CCA). It is administered by the Australian Competition and Consumer Commission (ACCC) and provides some rights for private action. Schedule 2 of the CCA sets out the Australian Consumer Law (ACL). The ACL prohibits conduct that is misleading or deceptive or unconscionable.

Ms Guy brought actions under the ACL (provisions of s18 and ss20 and/or 21 of the Australian Consumer Law (Cth)) for misleading or deceptive conduct, in that the Dolphin Treasure Electron Gaming Machine (EGM) gave rise to misrepresentations about the odds of winning, and with respect to unconscionable conduct, in that there was a class of gamblers who were ‘habituated’ or ‘addicted’ to gambling and whether such a class of gamblers were at a ‘special disadvantage’.

The claim was limited to what occurs during the playing of the Dolphin Treasure EGM.

The applicant

The applicant, Shonica Guy, had gambled for 14 years. Ms Guy described[5] her betting style and how she would feel a rush of adrenaline when entering a gambling venue and how she became attached to particular machines. A typical session would last four hours and Ms Guy recalled spending $1,200 in one session. In 2006, she began to wonder if she had a gambling problem and visited a financial planner and gambling counselling service. She declared bankruptcy in 2009 and then began researching problem gambling and addiction.

Dolphin Treasure EGM

The Dolphin Treasure EGM is just that, an electronic gaming machine, and the odds of winning and losing are calculated by a random number generator in the machine. However, the graphic and physical interface with the gambler involves the production of images and noises which make sounds like reels spinning[6] (reels which are actually not present) and that when a ‘reel’ stops it ‘overshoots’ a little before stopping,[7] again promoting the idea of the presence of physical reels which distracts from the fact that a computer programme is behind the operation of the device. Despite the fact that the gambler is supposed to know it is a computer game, the interface challenges this cognition. To win, the gambler must achieve certain combinations of symbols. A ‘pay table’ is available for viewing on the machine and discloses how much a gambler will win for each of the possible 20 winning lines.[8] Ms Guy referred to information displayed on the machine, which she referred to as a ‘loss disguised as a win’.[9]

The Dolphin Treasure EGM was required by regulation to pay out at least 87 per cent and to provide a ‘Total Theoretical Return to Player’ (RTP) information to gamblers. The RTP was calculated over the ‘cycle of the game’, which for the Dolphin EGM was 35,640,000 plays, being the number of symbols on each reel multiplied (30x30x30x30x44).

Ms Guy made allegations about the size and representation of the reels as they appeared on the machine.

Her Honour Mortimer J undertook an extensive examination of how the Dolphin Treasure EMG worked and included pictures in her judgment. To understand the process, Mortimer J and counsel for the parties attended Crown Casino. Her Honour was given a $200 credit ticket to use in assessing the function of the machine.

Vulnerable players

Ms Guy also pleaded that she belonged to the class of ‘Vulnerable Players’, which were described as:

‘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 per cent of players of EGMs.’[10]

The outcome

The judgment ran to 151 pages and set out a complicated case complete with considerable legal and mathematical complexities.

Justice Mortimer dismissed the application and found that none of the applicant’s causes of actions had been made out.[11] However, she did find that the information about the theoretical RTP, as provided by the player information display of the Dolphin Treasure EGM, may be confusing to players and it may be that Crown and/or Aristocrat should consider amending the wording on the screen, or providing more information.[12]

Psychological manipulation

Justice Mortimer did not find that those designing the Dolphin Treasure software for Aristocrat were doing so in a way which was intended to practise 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.[13] However, the extent to which Mortimer J was aware of the scientific evidence on this topic is unclear.

In fact, EGMs are designed with the assistance of psychologists who understand neurophysiology and the biochemistry of addictions and the roles of the sounds, colour and lights. For example, they have long known that compared to full-misses, near-misses stimulate parts of the brain which invigorate gamblers’ desire to play.[14] As demonstrated with Ms Guy, poker machines can easily set up fallacious thinking that will promote addiction in players genetically and environmentally predisposed to addiction. Presumably this is not accidental on the part of the makers of poker machines and the venues that provide them.

Where to from here?

The matter was run pro bono by Maurice Blackman’s social justice practice team led by Jennifer Kanis. The case resulted in a great deal of publicity in the public domain about poker machines and the problems that can arise for vulnerable people. Much was learnt about poker machines and those that manufacture and operate them. Given the scope of the problem that poker machines present in Australia, they might well reappear in the legal space in the future.

This article was first published in the May/June 2018 edition of Precedent focusing on consumer law and product liability.

 

Ngaire Watson is a barrister and registered nurse at Second Floor Selborne Chambers, Sydney.

 

 

The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

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Tags: Ngaire Watson consumer rights Consumer law Poker machines Misleading and deceptive Unconscionable