Guy v Crown Melbourne Ltd (No 2)

[2018] FCA 36

FEDERAL COURT OF AUSTRALIA

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

File number:

VID 1274 of 2014

Judge:

MORTIMER J

Date of judgment:

2 February 2018

Catchwords:

CONSUMER LAW – misleading or deceptive conduct – “poker” machines – whether features of the Dolphin Treasure electronic gaming machine give rise to representations about the odds of winning which are misleading or deceptive – whether representations are made by Crown Melbourne in making the electronic gaming machine available for gambling – whether representations are made by Aristocrat in manufacturing and supplying the machine – consideration of the term “theoretical return to player” – application dismissed

CONSUMER LAW – unconscionable conduct – whether there is a class of gamblers of the Dolphin Treasure electronic gaming machine who are “habituated” or “addicted” to gambling – whether such a class of gamblers are at a “special disadvantage” – consideration of expert evidence concerning the relationship between features of electronic gaming machines and gambling disorder – whether the respondents engaged in unconscionable conduct in making the machine available for play to this class of gamblers – application dismissed

Legislation:

Competition and Consumer Act 2010 (Cth), s 131C; Sch 2 Australian Consumer Law (Cth), ss 18, 20, 21, 22, 232

Evidence Act 1995 (Cth), ss 53, 136

Federal Court of Australia Act 1976 (Cth), ss 21, 37AF, 37AG, 37AI

Trade Practices Act 1974 (Cth), ss 51AC, 52

Federal Court Rules 2011 (Cth), r 2.32

Casino Control Act 1991 (Vic), ss 1, 6, 8, 59, 62A, 62AA, 62AB, 62AC, 62B, 64, 69, 72, 77, 78, 78A, 78B

Constitution Act 1975 (Vic), s 19

Gambling Regulation Act 2003 (Vic), ss 3.1.1, 3.1.5, 3.2.1, 3.4.1B, 3.4.60, 3.5.1, 3.5.3, 3.5.4, 3.5.5, 3.5.6, 3.5.29, 3.5.30

Gambling Regulations 2015 (Vic), regs 5, 11, 12, 13, 14, 15, 17, 20

Gambling Regulation Regulations 2005 (Vic), regs 22, 23, 24, 25

Gaming Machine Control (Responsible Gambling Information) Regulations 2002 (Vic)

Victorian Commission for Gambling and Liquor Regulation Act 2011 (Vic)

Cases cited:

Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 40 FLR 165

Australian Broadcasting Commission v Parish (1980) 29 ALR 228

Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2; 96 FCR 491

Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51

Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73

Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682

Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liq) (No 2), [2017] FCA 709

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90

Australian Competition and Consumer Commission v Sampson [2011] FCA 1165

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640

Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760

Bing! Software v Bing Technologies [2009] FCAFC 131; 180 FCR 191

Blomley v Ryan (1956) 99 CLR 362

Bridgewater v Leahy [1998] HCA 66; 194 CLR 457

Colin R Price & Associates v Four Oaks Pty Ltd [2017] FCAFC 75; 349 ALR 100

Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447

Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; 249 FCR 421

CRW Pty Limited v Sneddon (1972) AR (NSW) 17

Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd [2016] FCA 1184

Director of Consumer Affairs Victoria v Manningham Property Group Pty Ltd [2017] FCA 1448

Director of Consumer Affairs Victoria v Scully [2013] VSCA 292; 303 ALR 168

Gardam v George Wills & Co Ltd (1988) 82 ALR 415

Gardner v Dairy Industry Authority (NSW) (1977) 18 ALR 55

Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 167; 2 FCR 82

Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; 249 CLR 435

Guy v Crown Melbourne Limited [2017] FCA 1104

Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651

Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564

Kakavas v Crown Melbourne Ltd [2013] HCA 25; 250 CLR 392

Louth v Diprose [1992] HCA 61; 175 CLR 621

McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd [1980] FCA 159; 33 ALR 394

Mees v Roads Corporation [2003] FCA 306; 128 FCR 418

Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110

Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17

Murphy v The Queen [1989] HCA 28; 167 CLR 94

National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90

Nixon v Slater & Gordon [2000] FCA 531

Pacific Dunlop Ltd v Hogan [1989] FCA 250; 23 FCR 553

Pacific Publications Pty Ltd v Next Publishing Pty Ltd [2005] FCA 625; 222 ALR 127

Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199

Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28; 258 CLR 525

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191

Pledge v Roads and Traffic Authority [2004] HCA 13; 205 ALR 56

R v Connare; Ex parte Wawn [1939] HCA 18; 61 CLR 596

R v J-LJ [2000] SCC 51; 2 SCR 600

R v Turner [1975] QB 834

Re HIH Insurance Ltd (In liq) [2016] NSWSC 482; 335 ALR 320

Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234; 53 NSWLR 43

Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865

Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; 200 CLR 591

Yorke v Lucas [1985] HCA 65; 158 CLR 661

Date of hearing:

12-22, 26-28 September 2017

Date of last submissions:

15 November 2017

Registry:

Victoria

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Category:

Catchwords

Number of paragraphs:

557

Counsel for the Applicant:

Mr R Merkel QC with Mr P Gray QC, Ms Z Maud and Mr C Tran

Solicitor for the Applicant:

Maurice Blackburn

Counsel for the First Respondent:

Mr N Young QC with Mr N Hopkins QC and Ms G Coleman

Solicitor for the First Respondent:

Minter Ellison

Counsel for the Second Respondent:

Mr P Jopling QC with Mr P Wallis

Solicitor for the Second Respondent:

King & Wood Mallesons

ORDERS

VID 1274 of 2014

BETWEEN:

SHONICA GUY

Applicant

AND:

CROWN MELBOURNE LIMITED (ACN 006 973 262)

First Respondent

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715)

Second Respondent

JUDGE:	MORTIMER J
DATE OF ORDER:	2 february 2018

THE COURT ORDERS THAT:

1.The application be dismissed.

THE COURT DIRECTS THAT:

2.The parties file a joint minute of proposed orders reflecting the Court’s reasons in relation to the s 37AF application, including proposed orders concerning the filing of a generally accessible Court Book, by 4 pm on 9 February 2018.

3.If the parties agree on appropriate orders for costs, and (if applicable) on any lump sum figures for costs, they are to file a joint minute of proposed orders on or before 4 pm on 16 February 2018.

4.In the absence of any joint proposed orders pursuant to paragraph 3 of these orders, on or before 4 pm on 2 March 2018, the parties are to file and serve submissions, limited to five pages, on appropriate orders for costs, including whether any costs orders should be made by way of a lump sum and if so, how that lump sum should be determined.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A SUMMARY OF THE FACTUAL CONTEXT FOR THIS PROCEEDING	[6]
Gambling on poker machines: a brief introduction	[8]
Crown’s business	[18]
Aristocrat’s business	[21]
The applicant and her lay witnesses (other than Dr Charles Livingstone)	[25]
The Dolphin Treasure EGM	[47]
The appearance of the Dolphin Treasure	[51]
The way the Dolphin Treasure functions: in general	[71]
The way the Dolphin Treasure functions: variation in the number of symbols on each reel	[84]
The way the Dolphin Treasure functions: variation in the frequency of symbols	[88]
The evidence about which witnesses have played the Dolphin Treasure	[93]
RELEVANT LEGISLATIVE PROVISIONS	[97]
The relevant ACL contravention provisions	[97]
The regulation of gambling in Victoria	[104]
THE APPLICANT’S ALLEGATIONS	[146]
The s 18 claim	[147]
The Equal Reel Size Representation	[153]
The Equal Symbol Distribution Representation	[155]
The Risk Representation	[157]
Members of the class to whom representations are said to be made	[160]
The s 18 claim as against Crown	[161]
The s 18 claim as against Aristocrat	[165]
The ss 20 and 21 claims	[167]
The s 20 claim against Crown	[173]
The s 20 claim against Aristocrat	[174]
The s 21 claim against Crown	[176]
The s 21 claim against Aristocrat	[178]
THE RESPONDENT’S OVERARCHING ARGUMENTS	[180]
CROWN’S RESPONSE TO THE INDIVIDUAL ALLEGATIONS	[187]
To the s 18 claim	[187]
To the s 20 claim	[196]
To the s 21 claim	[205]
The s 131C argument	[209]
ARISTOCRAT’S RESPONSE TO THE INDIVIDUAL ALLEGATIONS	[211]
To the s 18 claim	[211]
To the s 20 claim	[217]
To the s 21 claim	[225]
Aristocrat’s “formal” submissions	[229]
THE EVIDENCE	[232]
Applicant	[233]
Crown	[238]
Aristocrat	[240]
The joint expert report	[242]
The documentary evidence	[243]
The Court’s view at Crown Casino	[246]
Confidentiality orders	[249]
Ruling on the proposed s 37AF orders	[263]
THE EXPERT EVIDENCE AND THE CONCURRENT SESSION	[273]
My approach to the expert evidence	[276]
Professor Yücel	[288]
RESOLUTION	[304]
A general observation about my approach to the parties’ arguments	[308]
A general finding on the applicant’s claims	[311]
THE SECTION 18 CLAIM	[325]
What I accept from the applicant’s case	[325]
The class issue	[329]
How the view fits in with the constructed hypothetical gambler	[346]
The Equal Reel Size Representation	[350]
Even Reel Image	[351]
Spinning Reel Sound	[353]
Dispersed Symbols Image	[355]
The Equal Symbol Distribution Representation	[357]
Even Reel Image	[358]
Spinning Reel Sound	[359]
Dispersed Symbols Image	[360]
A submission relevant to both representations	[364]
The function of the “oversize” reel feature and the “starved reel” feature	[365]
The applicant’s reliance on “near misses”	[387]
The Risk Representation	[392]
Nature and function of the RTP	[392]
The alleged Risk representation is made	[412]
The Risk representation may be confusing but is not misleading	[423]
The s 18 claim as against Crown	[447]
The s 18 claim as against Aristocrat	[456]
THE UNCONSCIONABILITY CLAIMS	[460]
General findings	[461]
The pleaded class: “Vulnerable Players”	[464]
Summary of my conclusions	[476]
The section 20 claim	[478]
No “special disadvantage” established	[485]
The section 21 claim	[507]
None of the impugned conduct has the necessary unconscionable quality	[507]
Rejection of Aristocrat’s separate submission under s 21	[529]
The introduction of near misses into the ss 20 and 21 cases	[531]
CONCLUSIONS ON THE APPLICANT’S CAUSES OF ACTION	[537]
WHAT IS NOT DECIDED	[539]
The interrelationship between the ACL and the regulatory scheme in relation to gambling	[539]
The role of cognitive factors in gambling disorders and in those with difficulty controlling their gambling	[542]
The “contribution” of the identified features of the Dolphin Treasure EGM to the development or persistence of gambling disorder, or difficulties in controlling gambling activity	[546]
Accessorial liability of Aristocrat	[551]
Implications of findings of contravention	[552]
Appropriate relief	[553]
ORDERS AND COSTS	[554]

REASONS FOR JUDGMENT

MORTIMER J:

1. This case is about selected aspects of what happens when people gamble on poker machines. Whether or not one views the expenditure of money on various games of chance as a desirable or enjoyable activity or not, in this proceeding it is inappropriate to adhere to the language of a “game” and “players”. That language hides or minimises a number of matters: the inherent nature of the activity, the heavy commercialisation of poker machine gambling, the sophisticated inputs by manufacturers into the design of poker machines, the intensive regulation of these kinds of activities, and the harm done to significant numbers of people who gamble on poker machines, and to their families and loved ones.  

2. Aristocrat’s closing submissions referred to the language used by Latham CJ in R v Connare; Ex parte Wawn [1939] HCA 18; 61 CLR 596 at 610, to describe his own views that “all lotteries [are]… a moral pestilence”. However, his Honour recognised he could not give effect to those views in exercising judicial power in the case before him. Notwithstanding my view that the Court should not shy away from characterising this case as about gambling activities, rather than “playing” a “game”, it is no part of the Court’s task in this case to characterise gambling as a desirable, or undesirable, activity, nor to engage with policy decisions made by the executive and legislative branches of government about whether those activities should be lawful and if so, in what circumstances.

3. The proceeding concerns one particular kind of poker machine: an electronic gaming machine called the Dolphin Treasure. In these reasons I describe it as the Dolphin Treasure EGM. It is a kind of poker machine found quite commonly in many poker machine venues, and at the time of trial there were 38 such machines on the floor at Crown Casino. The applicant, Ms Shonica Guy, alleges that both respondents, Crown Melbourne Ltd and Aristocrat Technologies Australia Pty Ltd, have contravened the provisions of s 18 and ss 20 and/or 21 of the Australian Consumer Law (Cth), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). For the purposes of s 18 of the ACL (and I return to the details of the claims below), it is alleged they have contravened that provision because in designing the software for, and supplying, the Dolphin Treasure (Aristocrat) and in making the Dolphin Treasure with certain features available to the gambling public (Crown), both respondents have misled the gambling public about the odds of winning they enjoy when they gamble on the machines. The applicant also alleges contravention of s 52 of the Trade Practices Act 1974 (Cth), the predecessor to s 18 of the ACL.

4. For the purposes of ss 20 and 21 of the ACL, it is alleged the respondents have contravened those provisions because in designing the software for, and supplying, the Dolphin Treasure (Aristocrat) and in making the Dolphin Treasure with certain features available to the gambling public (Crown), both respondents have played on the vulnerabilities of a subsection of the gambling public at risk of developing a gambling disorder, or becoming “problem gamblers” by misinforming them about their odds of winning and by encouraging them into chasing further “wins”, especially through the way the Dolphin Treasure rewards gamblers when they “win” less than the amount they have bet.

5. I have concluded that the applicant has not proven her allegations and, for the reasons set out below, the application must be dismissed. I have reached that conclusion in a way which means there are a number of arguments raised by the parties which I have found it unnecessary to decide. These matters are summarised at [539] to [553] below.

   A SUMMARY OF THE FACTUAL CONTEXT FOR THIS PROCEEDING

6. The applicant’s claims are limited to what occurs during the playing of the Dolphin Treasure EGM. Before turning to the detail of the claims, it is necessary to set out some more general background and context, as all parties relied on these matters to advance their arguments.

7. What I set out in this section constitutes my findings of fact on these matters of background and context, and my findings about the Dolphin Treasure EGM. My findings of fact as they relate more specifically the ACL claims are set out later in these reasons.

   Gambling on poker machines: a brief introduction

8. A useful starting point for considering the history of poker machines is the Report of the Board of Inquiry into Poker Machines, an inquiry which was led by the Honourable Murray Wilcox QC, a former judge of this Court. That Report was presented to the Governor of Victoria on 28 November 1983. The terms of reference for that inquiry were to inquire into, report on and make recommendations on whether poker machines should be permitted in Victoria. By the time the Wilcox Report was commissioned, poker machines were already available in other jurisdictions, such as in New South Wales and the Australian Capital Territory. The Wilcox Report contains an introduction to the history of poker machines. The whole of the Wilcox Report was admitted into evidence, and I did not understand its recitation of the history of poker machines to be the subject of any dispute between the parties. It is a useful, relevant and objective source to provide some context to the issues raised in this proceeding.

9. According to the Wilcox Report, the “poker machine” was invented by Charles Fey, a Californian mechanic, in 1887 or 1895, depending on the source one consults. That particular machine was called “The Liberty Bell”, and consisted of three reels, each with ten symbols. As described by Mr Wilcox, the machine operated by a player putting in a 5 cent coin which:

   …when placed in a slot in the machine, enabled the player to pull the handle thereby causing the reels to rotate. If a winning combination was showing in the window when the reels stopped the machine paid out a predetermined number of coins.

10. As the use of Mr Fey’s “slot” machines became widespread, different versions of the machine appeared under different names. “Fruit machines” featured oranges, cherries, and other fruit symbols, “jackpot machines” featured large jackpots, and “poker machines” featured playing card faces. At the time of Mr Wilcox’s Report, outside Australia, such machines were almost universally known as “slot machines” or “slots”. In Australia, a difference in perception between “fruit machines” and “poker machines” had emerged by the 1930s. According to the Report:

    It appears that many of the early Australian machines were principally of the “fruit” variety. The odium which attached to these machines following a Royal Commission in 1932… led a New South Wales cabinet minister to make the absurd statement that whilst “fruit machines” were illegal in registered clubs, “poker machines” were not.

11. Mr Wilcox traces the acceptance of the term “poker machines” to this period in time. In New South Wales, the legalisation of such machines in 1956 used the term “poker machines” to apply to all slot machines. That term then became enshrined in legislation as the Australian descriptor for slot machines.

12. Due to factors such as the ability for gamblers to “cheat” or manipulate early versions of the poker machines, as well as the need for the machine to return amounts to gamblers more accurately, by the 1960s mechanical poker machines began to be superseded. The successor was an “electro-mechanical” machine, which became the general machine available in New South Wales in the 1970s.

1. In the late 1970s, a “microprocessor” machine was developed, which used a modern microprocessor or mini-computer. According to the Wilcox Report, such machines went some way to reduce gamblers’ interference with the payouts of the machines.

2. Evidence about the development of modern EGMs was given in this proceeding by Ms Natalie Bryant, who is the Executive Producer and Special Projects for Aristocrat. Ms Bryant has been employed by Aristocrat for more than 20 years in various “game” designer and development-type roles. Although the chronology is not entirely clear, Ms Bryant’s uncontested evidence is that the next developmental stage was the introduction of computerised “stepper” EGMs, where EGMs with physical reels were controlled by a computer running a random number generator. It may be that these are related to the “electro-mechanical” or “microprocessor” machine described in Mr Wilcox’s Report, although this was not clear on the evidence. The modern EGMs, such as the Dolphin Treasure EGM, then followed these “stepper” machines. Modern EGMs, such as the Dolphin Treasure “in nearly all cases” involve video screens, on which animated spinning reels are displayed. Thus one of the key components of the functioning of the original slot machine – spinning reels – is now a computer generated illusion. Nevertheless, the importance of this component to the attraction that poker machines have for those who gamble on them means this the spinning “reel” retains its visual prominence in modern poker machines.

3. Despite the considerable history of poker machines in NSW, the Wilcox Report recommended against the introduction of poker machines in Victoria. However, in 1991, the then Premier of Victoria, Ms Joan Kirner AC, announced that EGMs would be allowed into licensed clubs and hotels. Subsequently, the Gaming Machine Control Bill 1991 (Vic) passed the Legislative Assembly and Council on 8 October 1991, and received Royal Assent on 15 October 1991, legalising and regulating poker machines in Victoria.

4. That policy decision was controversial at the time it was made, and as the evidence in this proceeding demonstrates, it remains so.

5. It is not disputed that EGMs are now widely available across a range of venues in Victoria, including in licensed hotels, clubs and of course Crown Casino. According to the Victorian Commission for Gambling and Liquor Regulation’s 2015-2016 Annual Report, which is in evidence, the total number of EGMs authorised in Victoria as at 30 June 2016 was 27,011.

   Crown’s business

6. Crown is an incorporated entity licensed to operate a casino at Southbank in Victoria, pursuant to the Casino Control Act 1991 (Vic), referred to in these reasons as Crown Casino. Among other activities, Crown operates and makes available for play to the public EGMs at that venue.

7. Under the Casino Control Act, Crown is licensed to operate 2,628 EGMs, and as at 16 November 2016, it had 38 Dolphin Treasure EGMs available for play on the gaming floor at Crown Casino. It is not disputed by the applicant that Crown only makes available for play by the public those machines which the Victorian Commission for Gambling Regulation or its successor, the Victorian Commission for Gambling and Liquor Regulation, has approved in writing for use at Crown Casino. I return later in these reasons to what the process of approval entails, as well as to the gambling regulations and standards to which Crown is subject.

8. The Dolphin Treasure EGMs are manufactured and supplied by Aristocrat to Crown, for the purposes of being made available for play at the Crown Casino floor. The nature of the business relationship between Aristocrat and Crown in relation to the supply of Dolphin Treasure EGMs was contested in some aspects.

   Aristocrat’s business

9. Aristocrat is an incorporated entity listed on the Roll of Manufacturers, Suppliers and Testers maintained by the Victorian Commission for Gambling and Liquor Regulation pursuant to s 3.4.60(1) of the Gambling Regulation Act 2003 (Vic). It carries on the business of manufacturing and supplying hardware and software for EGMs, including manufacture and supply of the Dolphin Treasure EGM. It has a business relationship with Crown in that it supplies EGMs to Crown, to be made available to the public. In this sense and in the context of this proceeding, Aristocrat does not interact directly with members of the public who use the Dolphin Treasure EGM at Crown Casino.

10. According to evidence given by Ms Bryant, Aristocrat’s game design division contains a number of groups. Her evidence about this, which was not contested, is that Aristocrat’s Design and Development division is subdivided into game studios, technical support studios, and engineering. Game studios design and develop individual poker machines. The technical support studios include several smaller technical teams dealing with software development. The Design and Development division also has a Compliance Group which includes teams handling the communication with regulators and authorised testing facilities.

11. One such game studio situated in the Design and Development division is Oz Studios, the studio within which Ms Bryant works. There are approximately 170 people working in Oz Studios, five of whom are Executive Producers, who work with a multidisciplinary team, including mathematicians, art designers, software developers, and software testers.

12. Aristocrat’s business in the manufacture and supply of poker machines is subject to a number of different regulations, including in relation to how machines are designed, what information they must display, down to the amount of time it takes for a reel to spin. I discuss these regulations in further detail at [104] below.

    The applicant and her lay witnesses (other than Dr Charles Livingstone)

13. The applicant filed affidavits from six lay witnesses (excluding an affidavit of Dr Charles Livingstone, which I discuss later in these reasons), each of whom gave evidence about their gambling history with poker machines. None of the applicant’s lay evidence is contested, although Crown and Aristocrat make submissions as to the weight that should be accorded to them, and its relevance. None of the lay witnesses were cross-examined.

14. At [95] below, I set out the details of which lay witnesses had played the Dolphin Treasure EGM and in what circumstances.

15. The applicant, Ms Shonica Guy, is a volunteer coordinator at Pokies Anonymous and Gambling Link Support Group. She gave evidence about her own history of gambling and what she describes as her problem gambling. Like the other lay witnesses, Ms Guy deposed that she was introduced to EGMs, and, over time, began spending a significant amount of time on the machines. From about 1995, she began going to the Windsor Hotel in Windsor Gardens, Adelaide, fortnightly, to play on EGMs. She was unemployed and on social security payments at the time, and spent all her “free” money on the EGMs. Eventually she began playing on the Dolphin Treasure EGM, drawn to it by the graphics and by the chance to win “free spins”. Initially, she wanted to win free spins in order to win more money, but she deposes that eventually, she wanted to win free spins so that she could stay longer on the machine. The “free spin” feature of EGMs generally was described by almost all lay witnesses as a feature which drew them to particular EGMs having this feature: Ms Libby Mitchell, Ms Anna Bardsley, Ms Conny McLaughlin, Mr Robert Ingmire, and Ms Guy all described the importance of this feature to their gambling habits.

16. Ms Guy’s evidence was that she felt more in control when she was playing the Dolphin Treasure EGM compared to other machines. Like other lay witnesses, she felt that she would “enter a zone” when playing the EGMs, and that she would “not think of much else”. She would stay at the venue until she had no more money to gamble that day.  

17. Ms Guy also gave evidence as to her betting preferences. She said that she would:

    …usually bet the second highest amount for the multi-lining permitted by the machine but this would fluctuate. If I had just won anything at all on any one spin I felt like I was lucky and would usually bet the maximum multi-lining amount on the next spin.

18. That was until she was low on credits, at which point she would alter her gambling style and gamble conservatively. Ms McLaughlin gave similar evidence about her preference for multi-line betting, deposing:

    I always played on multiple lines at the pokies. I thought that improved my chances of winning. If my husband was ever with me I would tell him off for playing one line. I told him you need to play them all.

19. This preference for multi-line betting was also the case for Ms Mitchell and Mr Ingmire.

20. Ms Guy also described how she felt when gambling on EGMs:

    I felt a rush of adrenaline upon entering a gambling venue. I became so anxious to get to my machine that I would notice which change machine would drop coins out faster. I would hope that no one was on my machine. When someone was, I would think “Get out of my way!” I would sit on the machine next to the one I wanted and wait, betting on a machine that I didn’t even want to be on.

    Once I got into the venue and sat down at my poker machine, I was relieved. I would relax at the start, but would worry as I lost more money and the amount I had left got close to $10.

21. She described that the length of time she spent at a venue correlated with the amount of money she had. A typical session for Ms Guy lasted four hours, and she recalled once spending $1,200 in one session.

22. Ms Guy described how it was in 2006 that she began to wonder whether she had a gambling problem, and visited a financial planner and gambling counselling service. She subsequently declared bankruptcy voluntarily in 2009, and then began to research problem gambling and addiction in greater detail.

23. The experience of Ms Guy is reflected in the other lay witnesses. Each of them deposed to their experiences with EGMs, and how it was that they came to play EGMs, or how they returned to playing EGMs after trying to quit. Some of the witnesses gave evidence that the time they started playing pokies more regularly coincided with stressful times in their lives. Ms Bardsley deposed to playing EGMs by herself in order to “zone out” of her personal and family problems. Ms Mitchell deposed that, after quitting EGMs, she “relapse[d]” when she experienced new personal stresses in her life.

24. Like Ms Guy, other lay witnesses described the calming feeling of playing EGMs and of “zoning out”. Ms Bardsley described how she wanted “to prolong the time I could spend at the machine,” that she:

    …was drawn to the lights and sounds the machines emitted and found them to be spellbinding. I would zone out when using the machines. This allowed me some respite from the amount of stress I felt I was under in my personal life. I felt I deserved a break from the stress I felt under.

    I found the sounds and visuals of the machines soothing. I felt that I was searching for this. I recall that on hearing the jingles they played, I felt special. I felt like I was getting an adrenaline rush upon seeing the lights and sounds of poker machines and would feel agitated if I didn’t play the poker machine.

    My agitation would subside when I started playing on a machine. I would also feel a rush of anticipation with every push of the machine. I would drag my finger across symbols as if I were pulling the reels to my desired position.

25. Similarly, Ms Catherine Sommerville described how she “became absorbed in whatever machine I was playing while I played it. I was mesmerised by the ritual of playing: the images, sounds, lights and anticipation. It felt hypnotic.” For her, making money was not her primary motivation for playing EGMs, “[p]laying was my motivation for playing”. Mr Ingmire also described that he felt like he was “hypnotised”, and that he was on “autopilot” when playing. Ms Mitchell described the “relaxing” experience as “like blitzing your mind”.

26. Ms McLaughlin described that when she played poker machines, she “felt like I was escaping the mundane troubles in my life… I didn’t have to worry about the husband, kids, work, bills or anything. Going to the pokie venue felt automatic.”

27. Some witnesses described being drawn in to venues to play EGMs, even when they were on their way elsewhere. Ms Bardsley deposed:

    I would leave for appointments early to allow myself time to gamble or would attend venues on the way home. I felt that I was almost unable to drive past a signed poker machine venue. I would often make excuses to myself to justify entering venues such as needing to use their bathrooms or wanting a cup of coffee. On these occasions I would always end up using the pokies.

28. Ms Sommerville described her “compulsion” to play as so strong that she would go to a pokies venue during the day, when she was meant to be at work.

29. As with Ms Guy, all lay witnesses described how they spent significant periods of time gambling on EGMs, losing a great deal of money in one session. Ms Bardsley described spending three to four hours at a time gambling on EGMs, but that sometimes she would gamble for seven to eight hours. She would always spend hundreds of dollars in one session, and would withdraw money from an ATM if her money was exhausted too quickly. Ms Sommerville described how she “couldn’t stop playing” and how she spent all of her disposable money over the course of a few months on EGMs. She sold her car to finance her gambling. She described how she would sometimes wait until midnight so that the daily limit on her ATM withdrawals would reset. Ms McLaughlin described how she went from playing 30 minutes at a time, to playing three hour sessions, if not longer, playing until she had no more money that day.

30. Perhaps most significantly, Ms Mitchell described how she would sometimes be at a venue for 24 hours in one session. She stopped a session when she ran out of money, when the venue closed, or when she was “totally exhausted”.

31. Some lay witnesses described the feeling of being ashamed of their gambling habits. Ms Bardsley deposed that she would move between gambling venues, as she was “ashamed of being seen too often at the one venue. I did not want people, including venue staff, to know that I had a problem.” She would also lie to others about where she had been. Ms Mitchell described how she was “highly embarrassed” as she was a home economist but felt that she could not manage her own budget.

32. Each lay witness also described how they sought to stop their gambling. Mr Ingmire in particular, deposed that he signed himself up to the Australian Hotel Association’s self-exclusion program, slowly adding more and more venues to the self-exclusion list. He eventually asked to be excluded from venues in the whole of Victoria, but was informed that this was too difficult.

33. Like Ms Guy, all lay witnesses described how gambling has adversely affected their lives. All witnesses described the significant financial losses, to varying degrees. Financial losses were significant for all witnesses who could put a dollar amount on their losses – Ms Laughlin estimates that she lost $350,000; Mr Ingmire estimates he lost $360,000. All described the emotional and mental impact of gambling on them, and on their families and loved ones. Ms Sommerville described how her relationship broke down, and how she closed herself off from her family. Ms Mitchell described her loss of social interaction, how she lost the ability and desire to interact with others. Mr Ingmire described losing his relationship and his house.

34. I accept the evidence of these lay witnesses reflects their experience with gambling on poker machines, including but not limited to the Dolphin Treasure EGM. I address the relevance and weight of this evidence to the applicant’s claims in the resolution section below.

    The Dolphin Treasure EGM

35. The Dolphin Treasure EGM is a type of modern EGM (described at [14] above) designed and manufactured by Aristocrat, with virtual, rather than mechanical, “reels”. Ms Bryant gave evidence about the history and development of the machine, which I accept. The Dolphin Treasure was first released in approximately 1997. Since then, a number of different versions have been made by Aristocrat. These different versions were developed for a range of reasons, including to allow the use of different credit denominations, computing advances in relation to graphics and animation, and changes to regulatory requirements. Other Aristocrat poker machines use the same mathematics as Dolphin Treasure, but have different names and themes. Ms Bryant deposed that such poker machine games are referred to as “clones” – for instance, the EGM “Queen of the Nile” is a clone of Dolphin Treasure.

36. It is apparent from the evidence that the Dolphin Treasure is a popular style of poker machine, and somewhat traditional in its style. Some of the applicant’s lay witnesses described it as their favourite machine. What led to the choice by the applicant and her legal representatives of the Dolphin Treasure as the poker machine which is the subject of the claims made in this proceeding is not relevant to the Court’s determination of the issues in this proceeding, however it can safely be said that it is a popular and relatively common machine. Ms Bryant also described the Dolphin Treasure EGM as a “long-standing and successful” EGM for Aristocrat.

37. I note that the impugned Dolphin Treasure EGM excludes an EGM known as “Dolphin Treasure Legends” when played in “Deluxe” mode, which has different components and rules to the pleaded Dolphin Treasure EGM.

38. As the respondents emphasised, this proceeding concerns only the 38 Dolphin Treasure EGMs which were on the floor at Crown Casino as at the time of trial. Thirty-two of those machines were licensed by Crown from Aristocrat under a “time on floor” arrangement, which is a monthly licence, while the remaining six were owned outright by Crown. If the difference between the ownership arrangements for the thirty-two machines, as opposed to the six owned by Crown might have been material, given the conclusions I have reached, it is now not of any legal or factual significance to the outcome of the applicant’s claims. The Court was not directed to any evidence (if it exists in the more than 40,000 pages of evidence before the Court) as to how many Dolphin Treasure EGMs are manufactured and supplied by Aristocrat across Australia.

    The appearance of the Dolphin Treasure

39. In this section I set out the basic appearance and features of the Dolphin Treasure EGM visible to a gambler. The facts set out here are not disputed between the parties.

40. A photo of the pleaded Dolphin Treasure EGM is shown below. The photo shows three sections of the machine which are relevant to this proceeding: the top of the machine displays the pay table, which I explain further below, the middle of the machine shows the video screen, and below the video screen are the buttons that a gambler presses to use the machine or to access information about the EGM.

41. When a gambler is about to commence play on the Dolphin Treasure EGM, prior to having pressed any button, the following screenshot shows what is visible on the video screen. It displays a matrix of symbols and a 15 symbol grid, three symbols high and five wide. Harking back to the origins of these machines, each of these five vertical columns is described as a “reel”. It can be seen that each “reel” appears visually to be separated from its neighbouring reel (looking left to right) by a gap or line (in this screen shot, in blue), which contributes to the visual impression that the vertical column is an old fashioned mechanical reel, although it is not. It is agreed between the parties that it is apparent to a gambler that each of these reels is a computer graphic, not a physical or mechanical reel, as used to be the case. I will continue to use the term reel, without quotation marks, although that is, as I have found, no more than a description of the visual appearance rather than the function of the EGM. Each Dolphin Treasure EGM has 13 symbols, some of which are visible in the below screenshot. The 13 symbols are: the number nine, the number 10, pictures of the playing card symbols “jack” (represented by “J”), “queen” (represented by “Q”), “king” (represented by “K”) and “ace” (represented by “A”), and pictorial representations of a turtle, seahorse, starfish, octopus, “fish school”, treasure chest and a sunrise. The numbers 9 and 10, and the playing card symbols, are referred to as “royals”, while the remainder are referred to as “picture symbols”. The retention of some playing card symbols again harks back to the origin of “poker” machines, as I described above. This screenshot is taken from a video of the Dolphin Treasure EGM being played at Aristocrat’s offices, which was annexed to Ms Bryant’s affidavit.

1. The above screenshot is also the screen that the gambler will see during play. The gambler can select the number of credits to bet per line (represented by the numbers in red at the bottom of the screen), and whether to bet on one line or multiple lines (represented by the numbers in blue at the bottom of the screen). A gambler may bet one credit, two, three, five or 10 credits per line, with each credit being allocated a certain monetary amount. The gambler can also select how many “lines” to play across, being one, five, 10, 15 or 20 lines. In the screenshot above, only one line is being played, and only one credit bet for that line: that can be seen from the illumination of the number “1” in red and “1” in blue.

2. The top panel or “meter” shows the words “CREDIT”, “BET” and “WIN”. These indicate, respectively, the amount of remaining credit on the machine (that is, the total amount of money the gambler still has in the machine), the amount that is bet on each spin, and the amount that is won on a spin. The figures are expressed both in dollar amounts and in “credit” amounts. The amount of credit corresponding to an Australian dollar changes depending on the machine: for example, a machine may be a 1 cent credit machine, or a 10 cent credit machine. In each case, by selecting the red number “1” on the “bet per line”, the gambler will be betting respectively either 1 cent per line or 10 cents per line, for a spin.

3. The five animated reels appear to move vertically when the gambler starts to operate the machine, and a “spin” is initiated. The reels stop consecutively, from left to right, at regular intervals during play, with a “ticking” sound as each reel comes to a rest. It was accepted by Ms Bryant that sound is intended to sound like a mechanical reel coming to rest. For instance, the below screenshot, also taken from the video annexed to Ms Bryant’s affidavit, shows a spin having been initiated, and the reels coming to a stop from left to right. The screenshot shows that the first two reels have stopped, the third reel is about to come to a stop, and the fourth and fifth reels are still “spinning”. It can also be seen (by the illuminated blue number “1”) that only a one line play has been selected. I will continue to use the language of “spin” and “spinning” without continuing the quotation marks, even though, as I have noted, this is a visual illusion created by the software of the EGM.

4. When a reel comes to a stop, it “overshoots” a little before stopping. That is to say, the reel appears to “bounce” before coming to a rest. Although in cross-examination Ms Bryant expressed a different view, by final submissions it was not disputed by the respondents, as the screenshot of the fourth and fifth reel above shows, that it is not realistically possible for a gambler to count, recall or estimate the number and order of symbols in each column, or to compare the number and order of symbols between each column.

5. In order to win money from the machine, certain combinations of symbols matching the winning combinations, displayed on the pay table, must come to a stop on a particular win line, from left to right. The most straightforward win line is win line 1, which requires matching symbols across the middle row of the matrix. However, there are up to 20 win lines on the impugned Dolphin Treasure EGMs. A picture of the 20 win lines is shown below. This picture was taken during the view by the Court of two Dolphin Treasure EGMs at Crown Casino. A gambler may bet on one line in a given game, or she or he may bet on up to 20 lines, in what is referred to as multi-line betting. When playing multiple lines, the gambler will win a prize whenever a winning combination of symbols appear left to right on consecutive reels and positioned along any win line on which the gambler has placed a bet. To access this screen showing all the possible win lines, and therefore this information, the gambler must press a button on the machine, then select “View Game Rules” on the screen, and then scroll through the screens to reach the screen which displays the possible win lines. I infer that many gamblers with a high level of familiarity with the Dolphin Treasure EGM are likely to know most, if not all, of the possible available winning combinations. The only way that gamblers unfamiliar with this machine can access this information is through selecting the Game Rules screen, and scrolling through to this page.

6. The “pay table” information on a machine discloses how much a gambler will win for each of the 20 possible winning lines. It is physically displayed at the top of the machine at all times: see the top of the photo at [52]. This information may also be accessed via the “View Game Rules” option. A screenshot of this information on the playing screen is shown below. It shows that, for example, if a gambler gets four sunrises in a row, from left to right in the matrix on a particular win line, the gambler will win 2000 credits. In order to win any combination, the symbols must align consecutively, from left to right, on a win line that is being played. There cannot be a different symbol in the middle, unless that symbol is a sunrise, which is a “wildcard” symbol and can be substituted for any other symbol (other than a treasure chest) to form part of a winning combination. The more general exception to this rule is the “scatter” symbol, which on the Dolphin Treasure EGM is the treasure chest symbol. When two or more treasure chests appear anywhere on the matrix, the gambler will win a prize in accordance with the pay table shown below.

7. As can be seen in the pay table above, most symbols require a minimum of three matching, sequential symbols to result in a winning combination. The exceptions are nine, turtle, seahorse, sunrise and treasure chest, which require only two for a winning combination.

8. When a gambler wins on a particular win line, the screen shows the gambler which line has resulted in the win. For instance, the below screenshot, taken from the view recording, shows that the gambler has won on win line 10, because of the three jacks aligning on the win line. The “tic tacs” between the reels (in this screenshot, coloured blue) indicate the win line which produced the win. It can be seen this was a multi-line bet (indicated by the illuminated numbers on each side, and by the illuminated “10” in blue at the bottom of the screen), so the win does not have to occur across a single line of symbols. Although there is another jack appearing in the fourth reel, that jack is not part of the win, because the alignment of four jacks in that manner does not correspond with any of the win lines shown in the picture at [58] above.

9. This screenshot also shows what the applicant referred to as a “loss disguised as win” and what the respondents described as a “less than bet” win: that is, the amount of credits won in the example below (15) is less than the amount bet (30). Although the gambler has “won” on line 10 in this instance, because it was a 30 credit bet, the play has resulted in a net loss of 15 credits. I return to this concept later in these reasons.

10. All pay table wins, except treasure chest wins, will be multiplied by the amount bet per line for that spin to get the total win amount. Wins involving the treasure chest symbol will result in a prize that is multiplied by the total amount bet for that spin (across multiple lines, if that was the bet placed). In the above screenshot, the win amount is 15 credits because three jacks in a row on a win line gives a payout multiplier of five (see pay table at [59], and the amount bet on the line was three credits. Three multiplied by five is 15.

11. When a gambler wins any amount, the Dolphin Treasure EGM displays sounds and accompanying lights. The “WIN” meter also increments to record the amount won. The duration of the sound and light display coincides with the amount won, and is synchronised with the WIN meter incrementing – the higher the win, the longer the sound and light display. For instance, according to Ms Bryant’s evidence, the duration of a sound may vary from less than one second for a relatively small win, to approximately one minute for very large wins. It does not matter whether it is a “less than bet” win (to use the respondents’ terminology) resulting in a net loss, or if it is a net win; the sounds and lights are displayed whenever a win on any line is recorded.

12. The gambler can also pull up more information about the game. If the gambler presses the “information” button, the following screen is brought up.

13. When “View Game Information” is pressed on screen, the following screen is shown.

14. This screen, referred to as the “player information display” in this proceeding, contains the following information:

    (1)it identifies whether the game is part of a “linked jackpot”;

    (2)it shows the “Theoretical Return to Player” or “RTP” (being 87.97% on this machine); and

    (3)it shows what is called “chances of winning” (based on “minimum bet selection” and excluding feature wins), by displaying the top five winning combinations, and the bottom five winning combinations, and the odds of winning these combinations. Thus, the information displays the five combinations which would give the greatest and smallest prizes respectively, and the odds of a gambler winning those prizes on this machine, but does not display the odds of bets in between these top and bottom five.

15. The text and information displayed on this screen forms a key part of the applicant’s pleading, and I return to these in more detail below.

16. The “View Tracking Information” option shows information about a gambler’s current playing session, and enables a gambler to keep track of when they start a game, and what their activity has been. It informs the gambler how much money has been inserted, how many credits have been played, how many credits have been won, overall session win or loss, the total time spent on the machine, the current time and credits available. A gambler can start or stop a tracking session as they wish. A screenshot of this is below.

17. The “View Game Rules” option relevantly shows information about how to play the game, and the win lines and pay tables I have described at [58]-[59] above.

    The way the Dolphin Treasure functions: in general

18. I set out here a description of the programmed “features” of the Dolphin Treasure EGM, which are not visible to a gambler but upon which parts of the applicant’s claim rests. In relation to the use of the term “features”, the applicant describes certain programmed devices, such as the distribution of the symbols across the reels, or the sounds that the EGM emits when each of the reels stop, as “features”. These are programmed devices, designed and included by Aristocrat. Since the applicant uses the term “features” in her further amended statement of claim, I adopt this term in these reasons.

19. The symbols displayed on the video screen after the gambler initiates a spin and where those symbols stop on each reel are determined by a random number generator that forms part of the EGM software. On the pleaded Dolphin Treasure EGM, there are 30 (or approximately 30 across all of the impugned Dolphin Treasure EGMs) stopping positions for the symbols on each of the first four reels (numbered from left to right), and 44 stopping positions for the symbols on the fifth reel (or approximately 44 across all of the impugned Dolphin Treasure EGMs). Each stopping position thus corresponds with a symbol. The software determines the outcome of each spin by calling the random number generator to provide a random stopping position at which the reels will come to rest. Ms Bryant deposed that, broadly speaking, symbols involved in combinations which give higher prizes tend to appear less frequently. That is, those symbols are programmed to appear less frequently on each reel. Because of the random number generator, the outcome of any given spin is independent of any other spin, and EGMs will not become more or less likely to produce winning outcomes the longer they are played.

20. Once the random number generator determines the stopping position for each reel, the software is programmed so that the section of the reel that “spins” in view of the gambler is taken from that section of the reel containing that stopping position. It must be borne in mind that there is no “reel” actually spinning as on the old slot machines. Instead, a visual illusion is created by the software. Thus, while the gambler will see the symbols spinning past in the order in which they have been programmed to appear on an individual reel, she or he will not see the full reel containing 30 or 44 symbols spinning past on any given spin – she or he will only see a section of the reel. For instance, if the random number generator determines that the first reel will stop at stopping position 11 (of 30, or 44 as the case may be), the section of the reel that will spin is only the section that contains stopping position 11 (and a few symbols either side). However, the visual impression created is that the whole reel is spinning right around all the symbols present on that reel, as an old fashioned mechanical slot machine would have done. This mode of operation was confirmed by Ms Bryant in cross-examination.

21. The probability of a particular symbol coming to rest is therefore determined by two variables: the number of times that symbol appears on a reel, and the total number of stopping positions on that reel.

22. The RTP is also an important component of the Dolphin Treasure EGM, as it is with all EGMs. The RTP of each machine appears on the player information display, as shown in the screenshot in [66] above.

23. Although it is a key point of contention as to what an ordinary and reasonable gambler understands by the term “theoretical return to player”, the intended meaning of the term is not in dispute between the parties. By reference to the National Standard (a regulatory document which I explain at [106] below), Ms Bryant explains the RTP thus:

    Theoretical RTP is the percentage of the total amount wagered that would be returned to players over the cycle of the game. Considering every possible outcome of the game over the cycle of the game, the theoretical RTP is the percentage of the total amount wagered that would be returned to players in winnings across all of those games.

    Because each play of an EGM game is random and not causally related to any other play of that game, EGM games do not cycle through every possible outcome but instead produce random outcomes. Accordingly, RTP is a theoretical measure based on the calculation of the probability of each possible outcome occurring and the amount that those outcomes will pay in proportion to the total amount wagered to achieve them. Generally, the theoretical RTP percentage for a particular prize outcome is the probability of that prize outcome occurring (ie the number of outcomes in the entire game cycle that would pay that prize outcome divided by the total number of outcomes) multiplied by the prize amount that would be paid for that prize outcome in proportion to the game cost. The sum of the RTP percentages for every prize outcome in the game provides the total theoretical RTP for the game.

    Over time, an EGM would be statistically expected to approach its theoretical RTP – in other words, the actual amount of money returned to players as a percentage of the total amount bet on a game will get closer to the theoretical RTP as more games are played.

    (Emphasis added.)

24. Ms Bryant deposed (by reference again to the National Standard) that a game “cycle” is the “total number of possible outcomes of a game”. For one of the Dolphin Treasure EGM configurations, where there are four reels containing 30 stopping positions and a fifth reel containing 44 stopping positions, the “cycle” is 35,640,000. That is, there are over 35.6 million possible outcomes for each spin of the Dolphin Treasure. As confirmed by Ms Bryant in her affidavit, this is determined by the mathematical equation . Thus, when Ms Bryant stated that “[o]ver time, an EGM would be statistically expected to approach its theoretical RTP”, it can be seen that the time over which this would occur, given there are 35.6 million possible outcomes for each spin, would be a very long time indeed. The length of time was not quantified in the evidence, although see [442] below in relation to the Victorian regulatory requirement. See also [405] below for a pictorial representation of the convergence towards theoretical RTP over time.

25. There are regulations, differing across jurisdictions, as to the minimum required RTP on each machine. The Dolphin Treasure EGMs have, as a minimum, an RTP figure of 87%, however as I set out below, the precise figure varies between machines. Although the RTP is visible to a gambler through the player information display, the manner in which the RTP is worked out for a particular machine is not visible to the gambler. As Ms Bryant deposed, the RTP is determined by a mathematical calculation that depends on the length of the game’s reel strips (which determines the possible number of outcomes or “cycles”), the sequence of symbols that appear, and the pay table of the game. The RTP is also affected by whether the particular machine has a linked jackpot, or a standalone jackpot.

26. Another relevant programmed feature of the Dolphin Treasure EGM is its “volatility”. Ms Bryant describes the meaning of this term in her affidavit:

    In relation to EGM games, volatility is used to describe the standard deviation of the outcomes of a game. Standard deviation is the measure of the spread or dispersion of numbers from their mean. Put simply, for a given theoretical RTP, a “high” volatility / high standard deviation game will have larger wins which occur less often, while a “low” volatility / low standard deviation game will have smaller wins which occur more often.

27. The volatility of a game is a product of the size of the different potential winning outcomes (that is, large wins or small wins), and the relative probability of achieving those winning outcomes. Section 3.9.17 of the National Standard, to which I return below, caps the “nominal standard deviation” of a game at 15. This ensures that an EGM does not have extremely high volatility, which would have the effect of too large a proportion of the RTP being returned via a small number of extremely unlikely but high paying outcomes. The evidence regarding the precise level of volatility of the Dolphin Treasure EGM was given by Ms Bryant during a portion of her evidence which was closed to the public, on the basis of a joint proposal from the parties and my satisfaction about the commercially sensitive nature of this evidence. However suffice to say that it is a function of the Dolphin Treasure EGM, and other EGMs, to have a pre-set volatility rate, not visible to gamblers, and which affects the relative size and frequency of winning outcomes.

28. Different models of Dolphin Treasure EGMs may also function differently, in the sense of having different symbol configurations. These variations for example, mean that different models may have different reel lengths, different distribution of symbols and different order of symbols on a particular reel. While the rules and pay table are consistent between different models of Dolphin Treasure EGMs, the RTP may vary within the regulatory constraints. The fact that different models have different reel configurations is not visible to the gambler. However, this variation led the applicant in her pleadings to allege the existence of a number of configurations of the Dolphin Treasure machine. As the case developed, and by the time of final submissions, it was apparent that although this level of detail (and the multitude of configurations set out in the pleadings) might have been necessary for accuracy, it was not necessary to descend into that level of detail for the applicant’s claims to be understood, nor indeed for those claims to succeed. Whatever the precise configuration of each Dolphin Treasure EGM on the floor of Crown Casino (in terms of the number of stopping points and the number of symbols in each programmed visual representation on each machine), the same arguments apply in the same way to each machine.

1. As with all other EGMs, Dolphin Treasure EGMs also have a pre-set “spin rate”. The spin rate is defined in the Gambling Regulations 2003 (Vic) to mean the “interval between spins on the gaming machine”. As Senior Counsel for Aristocrat put it, it is the time it takes for each reel to spin. The spin rate is regulated by s 62AC of the Casino Control Act, requiring the spin rate to be at least 2.14 seconds. That prevents each reel from spinning too slowly, or at least slower than 2.14 seconds for each reel. I return to this later in considering regulation of poker machines, but the point here is that this is again, a programmed feature of the Dolphin Treasure EGM which may not be obvious to an ordinary and reasonable gambler. Evidence subject to interim orders pursuant to s 37AI of the Federal Court of Australia Act 1976 (Cth) was adduced as to the range of spin rates of the Dolphin Treasure EGMs.

2. There are two other features of the Dolphin Treasure EGM which are key aspects of the applicant’s case: the “size” of the reel and the distribution of symbols among the reels. As these are key aspects, I discuss them in more detail.

   The way the Dolphin Treasure functions: variation in the number of symbols on each reel

3. In the applicant’s claims, as I set them out below, this is described as the “Oversized Reel Feature”, but since that is a description coined by the applicant as part of the framing of her case, at this point I shall attempt to describe that feature in more neutral terms.

4. Indeed, using the word “size” in this context is somewhat confusing. The word “size” might lead one to think the debate was about the dimensions of the reel, but it is not. It is about the number of “stops” which are programmed into each reel. As I have noted, each “stop” corresponds with a symbol. The “size” in this context is therefore referring to the number of symbols on each reel. The more symbols on a particular vertical column or reel, the greater the reel “size”, in the context of the applicant’s case. Given the Dolphin Treasure EGM reels are computer graphics and not physical reels, it is confusing to refer to the reel “size” in this sense, but one can picture an old mechanical reel where the physical dimensions of a reel may well have correlated with the number of symbols on the reel.  

5. The variation operates as follows. As pleaded, each of the first four reels of the Dolphin Treasure EGM contains approximately 30 symbols. The fifth reel (that is, the vertical column to the right if one is looking at the screen shot in [53] above), however, contains approximately 44 symbols. This exact number of symbols per reel varies depending on the particular configuration in a given model. For instance, the variation in what has been identified by the applicant for the purposes of her pleading as “configuration 4” models is that reels 1 and 4 have 30 symbols, reel 2 has 32 symbols, reel 3 has 31 symbols and reel 5 has 44 symbols. The variation in configuration 9 models is that reels 1 and 4 have 30 symbols, reels 2 and 3 have 32 symbols and reel 5 has 45 symbols.

6. The following table is the actual reel “map” configuration for configuration 1 of the Dolphin Treasure EGM, and is taken from an Aristocrat document entitled “Combination Sheet Approval”. Counsel for Aristocrat waived any confidentiality pertaining to this particular table during trial. It shows the number of stopping positions on each of the five reels on the left hand column, and the corresponding symbol for each position on each reel. It can be seen from this map that the first four reels have 30 stopping positions aligning with 30 symbols, while the fifth reel has 44 stopping positions aligning with 44 symbols. This is what the applicant describes as the “Oversized Reel Feature”.

   The way the Dolphin Treasure functions: variation in the frequency of symbols

7. In the applicant’s claims, as I set them out below, the variation in frequency of symbols on a given reel is described as the “Starved Reel Feature”. Since it is the applicant’s phrase, it is also appropriate to describe that feature of the reel in more neutral terms.

8. This feature concerns how often a particular symbol appears on each reel. The total number of a particular symbol is not distributed evenly, nor as evenly as possible, between each reel. For example, the symbol 10 on a given configuration may appear more frequently on one reel of an EGM game than another. In the reel “map” at [87] above, it can be seen that the symbol 10 appears twice on reel 1, once on reel 2, six times on reel 3, twice on reel 4, and four times on reel 5. The symbol 10 appears, in total, 15 times across all five reels. If the symbol was evenly distributed across all reels, it would appear three times on each reel. This is not the case, and the fact that it is not evenly distributed across all reels is not visible to a gambler on the Dolphin Treasure EGM. Indeed, the distribution and frequency of each symbol on each reel is invisible to a gambler on the Dolphin Treasure. Nor is any information about this feature provided to the gambler. In this sense, it is a wholly internal feature.

9. This uneven distribution of symbols is not the case for all symbols. The treasure chest and sunrise symbols – both very “valuable” symbols capable of leading to large wins – each appear only once on each reel. The ace symbol similarly has a more even distribution, at least in configuration 1. It appears twice on reels 1 to 3, three times on reel 4 and four times on reel 5.

10. The table below shows how each of the symbols are distributed across the five reels in configuration 1. This table is taken from reel maps provided by Aristocrat pursuant to the Court’s order on 21 November 2016.

11. The reel table shows that for many symbols, there is one reel where the symbol appears only once, and is otherwise unevenly distributed across the reels. The number and distribution of symbols affects the probabilities of symbols appearing in lines, after being subject to the random number generator.

    The evidence about which witnesses have played the Dolphin Treasure

12. Some lay witnesses gave some evidence about their playing of the Dolphin Treasure. Likewise some lay witnesses gave some evidence about playing poker machines at Crown Casino, without specifying the Dolphin Treasure EGM. In this section I summarise that evidence.

13. Although the applicant contends, and the respondents broadly accept (subject to their submissions about the effect on the applicant’s persuasive burden, to which I return later in these reasons) that this kind of evidence was not necessary at least for the s 18 claim, this evidence was capable of making a material contribution to the proof of the applicant’s case.

14. The following table summarises which lay witnesses played the Dolphin Treasure EGM, where they played it, and the frequency they played.

Witness	Played Dolphin Treasure?	Venue where Dolphin Treasure played	Frequency of play of Dolphin Treasure
Shonica Guy	Yes	Flagstaff Hotel; New York Bar and Grill	Frequently
Anna Helena Bardsley	Yes	Likely Crown Casino, but uncertain.	Frequently
Catherine Anne Sommerville	Yes, one of her favourites	Royal Oak Hotel in Richmond	Frequently*
Cornelia (Conny) McLaughlin	No	N/A	N/A
Libby Mitchell	Yes, her favourite EGM	Numerous venues, including Tanti Hotel in Mornington, the Tower Hotel, the Palace, the Royal Oak in Richmond, Crown Casino.	Frequently
Robert John Ingmire	Yes	Cannot recall venue	Infrequently

*I infer Ms Sommerville played the Dolphin Treasure frequently because she played poker machines regularly, and Dolphin Treasure was among her favourite EGMs. She did not depose to her frequency of play.

1. Before turning to a description of the applicant’s claims, it is appropriate to set out the applicable legislative provisions.

   RELEVANT LEGISLATIVE PROVISIONS

   The relevant ACL contravention provisions

2. The applicant alleges contraventions of ss 18, 20 and 21 of the ACL. Section 18 prohibits misleading or deceptive conduct:

   18  Misleading or deceptive conduct

   (1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

   (2)Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1).

   Note:    For rules relating to representations as to the country of origin of goods, see Part 5‑3.

3. Section 20 prohibits unconscionable conduct “within the meaning of the unwritten law”:

   20  Unconscionable conduct within the meaning of the unwritten law

   (1)A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time.

   Note:    A pecuniary penalty may be imposed for a contravention of this subsection.

   (2)       This section does not apply to conduct that is prohibited by section 21.

4. Section 21 also prohibits unconscionable conduct, as defined by its own terms:

   21  Unconscionable conduct in connection with goods or services

   (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.

   (2)This section does not apply to conduct that is engaged in only because the person engaging in the conduct:

   (a)institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or

   (b)refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.

   (3)For the purpose of determining whether a person has contravened subsection (1):

   (a)the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

   (b)the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

   (4)       It is the intention of the Parliament that:

   (a)this section is not limited by the unwritten law relating to unconscionable conduct; and

   (b)this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

   (c)in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

   (i)        the terms of the contract; and

   (ii)the manner in which and the extent to which the contract is carried out;

   and is not limited to consideration of the circumstances relating to formation of the contract.

5. Section 22(1) provides a non-exhaustive list of matters the Court may consider in determining whether s 21 has been contravened in the context of a customer-supplier relationship:

   22  Matters the court may have regard to for the purposes of section 21

   (1)Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

   (a)the relative strengths of the bargaining positions of the supplier and the customer; and

   (b)whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

   (c)whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

   (d)whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

   (e)the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

   (f)the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

   (g)       the requirements of any applicable industry code; and

   (h)the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

   (i)the extent to which the supplier unreasonably failed to disclose to the customer:

   (i)any intended conduct of the supplier that might affect the interests of the customer; and

   (ii)any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

   (j)if there is a contract between the supplier and the customer for the supply of the goods or services:

   (i)the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

   (ii)       the terms and conditions of the contract; and

   (iii) the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

   (iv)any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

   (k)without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

   (l)the extent to which the supplier and the customer acted in good faith.

6. The applicant seeks declaratory relief under s 21 of the Federal Court of Australia Act (Cth), which provides:

   21  Declarations of right

   (1)The Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

   (2)A suit is not open to objection on the ground that a declaratory order only is sought.

7. She also seeks injunctive relief under s 232 of the ACL, which provides:

   232  Injunctions

   (1)A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

   (a)       a contravention of a provision of Chapter 2, 3 or 4; or

   (b)       attempting to contravene such a provision; or

   (c)aiding, abetting, counselling or procuring a person to contravene such a provision; or

   (d)inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or

   (e)being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

   (f)       conspiring with others to contravene such a provision.

   (2)The court may grant the injunction on application by the regulator or any other person.

   (3)Subsection (1) applies in relation to conduct constituted by applying or relying on, or purporting to apply or rely on, a term of a contract that has been declared under section 250 to be an unfair term as if the conduct were a contravention of a provision of Chapter 2.

   (4)The power of the court to grant an injunction under subsection (1) restraining a person from engaging in conduct may be exercised:

   (a)whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of a kind referred to in that subsection; and

   (b)whether or not the person has previously engaged in conduct of that kind; and

   (c)whether or not there is an imminent danger of substantial damage to any other person if the person engages in conduct of that kind.

   (5)Without limiting subsection (1), the court may grant an injunction under that subsection restraining a person from carrying on a business or supplying goods or services (whether or not as part of, or incidental to, the carrying on of another business):

   (a)       for a specified period; or

   (b)       except on specified terms and conditions.

   (6)Without limiting subsection (1), the court may grant an injunction under that subsection requiring a person to do any of the following:

   (a)       refund money;

   (b)       transfer property;

   (c)       honour a promise;

   (d)       destroy or dispose of goods.

   (7)The power of the court to grant an injunction under subsection (1) requiring a person to do an act or thing may be exercised:

   (a)whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and

   (b)whether or not the person has previously refused or failed to do that act or thing; and

   (c)whether or not there is an imminent danger of substantial damage to any other person if the person refuses or fails to do that act or thing.

8. In the alternative, the applicant also makes claims under s 52 of the Trade Practices Act 1974 (Cth), in relation to the historic conduct of the respondents. Given my conclusions, it is not necessary to set out the Trade Practices Act provision here.

   The regulation of gambling in Victoria

9. As I noted at [15] above, poker machines were legalised in Victoria in 1991. Since then, there have been a number of legislative changes and reforms, and reviews have been conducted into the regulation of poker machines. It is not necessary to set out the history of these reforms. I set out in this section only those parts of the regulatory framework that are relevant to the present circumstances, in respect of which declaratory and injunctive relief is sought.

10. The primary legislative schemes relevant to EGMs in Victoria are the Casino Control Act, the Gambling Regulation Act 2003 (Vic), and the Gambling Regulation Regulations 2005 (Vic) and Gambling Regulations 2015 (Vic). Both the 2005 and 2015 Regulations are relevant because most (36 out of 38) of the Dolphin Treasure EGMs on the Crown Casino floor were approved under the 2005 Regulations, while the 2015 Regulations regulate the brochures which are made available on the Casino floor. Crown submits there is only one machine approved under the 2015 Regulations, but in my opinion the evidence discloses (annexure AS-2 to the affidavit of Mr Seci) there are two machines approved under the 2015 Regulations. In any event, it is clear both sets of regulations are relevant.

11. There are also the Standards made by the Victorian Commission for Gambling and Liquor Regulation (I refer to this Commission and its predecessor, the Victorian Commission for Gambling Regulation, as “the Commission”) under the Gambling Regulation Act which regulate the design of EGMs. The Australian/NZ Gaming Machine National Standard (the National Standard) is jointly developed by gaming regulators across the Australian and New Zealand jurisdictions. There is also a Victorian Appendix to the National Standard. Where there is a conflict between the two, the Victorian Appendix applies: V1.1 of the Victorian Appendix.

12. First, the Casino Control Act. The purpose of the Casino Act is set out in s 1(a), being to establish a system for the licensing, supervision and control of casinos with the aims of:

    (i) ensuring that the management and operation of casinos remains free from criminal influence or exploitation; and

    (ii)      ensuring that gaming in casinos is conducted honestly; and

    (iii) promoting tourism, employment, and economic development generally in the State;

1. She was not challenged on this answer. It was not suggested she was being dishonest, or disingenuous. There was nothing put to Ms Bryant to the effect that those designing the Dolphin Treasure software for Aristocrat (such as herself) were doing so in a way which was intended to practice 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 to behave in ways which were against their interests. The fact these matters were not explored is not determinative, but it is another illustration of how hypothetical the applicant’s case really is.

2. Although the following observations were made in the context of a case about a high roller, and also a cause of action under the unwritten law, the following passage from the reasons in Kakavas at [30] further indicates why there is nothing in the kind of conduct alleged against Crown and Aristocrat in this case which could attract the description of unconscionable, or – if Allsop CJ’s three norms and standards are deployed – against “conscience, justice or fairness”:

   It is necessary to be clear that one is not concerned here with a casino operator preying upon a widowed pensioner who is invited to cash her pension cheque at the casino and to gamble with the proceeds. One might sensibly describe that scenario as a case of victimisation. One could also speak sensibly of a gambler, who presents at a casino with the cash necessary to play the game, as a victim of the casino, if there are factors in play other than the occurrence of the outcome that was always on the cards. For example, the gambler may be evidently intoxicated, or adolescent, or senescent, or simply incompetent. But absent additional factors of this nature, it is difficult sensibly to describe the accommodation by an operator of a casino of a patron’s desire to gamble as a case of victimisation. That is especially so in the case of the high roller who has the means, should he or she enjoy a run of luck, to hurt the casino.

   (Footnote omitted.)

3. Kakavas may seem, on its facts, a case very far removed from the gambling undertaken by the “Vulnerable Players” identified by the applicant. However, again the vagueness of the class description does not allow that proposition to be stated with absolute confidence: there is nothing in the evidence, nor in the description of the group, which confines it to persons of modest financial means. No doubt such persons would be included, as the lay evidence might suggest, but equally so might gamblers who can afford to lose large sums of money without it impacting their financial situation. This is another example of the absence of any correlation between the impugned conduct and the characteristics of the group said to be affected by it. To this difficulty can be added the findings I have made at [491] to [495] above about the emphasis in the expert evidence of Professors Ladouceur and Nower on the variety of conscious choices made by those with a gambling disorder or with difficulties controlling their gambling. To reach the point of sitting down to use a Dolphin Treasure EGM, a gambler has made a number of choices. Once gambling on that machine, the gambler continues, on the evidence, to make a number of choices, but does so in an environment (both in terms of what appears on the machine and what is available in the casino) where she or he has access to a great deal of information which is capable of minimising or removing any harm caused by her or his choices. The information – both on the EGM itself and as available around the Casino alerts her or him to potential harm that might occur if she or he continues gambling, and to the fact the machine always wins. It provides her or him with access to people to talk to about any difficulties in controlling gambling, or any circumstances in her or his life that are prompting her or him to gamble; and provides her or him with an environment in which there are trained staff whose job it is to identify gamblers with signs suggesting they are having difficulty controlling their gambling. Again, there was no cross-examination to suggest this was some kind of façade, that Crown did not in fact employ such people, or those employees did not perform their job conscientiously and in good faith: Ms Bauer’s evidence was barely challenged at all.

4. On the evidence, and adapting the language from Kakavas, Crown does more than simply “accommodate” a gambler’s choice to gamble: it is required by law to, and does, alert her or him to the potential for harm, to ways to of avoiding it, and to where she or he can seek help if needed.

5. Finally, the applicant referred only selectively to the considerations set out in s 22 of the ACL, although there is authority to the effect that it is necessary for the Court to examine all the factors in s 22 as part of the circumstances of the allegedly unconscionable conduct: see Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28; 258 CLR 525 at [189] (Gageler J) (which concerned a similar provision under the Australian Securities and Investments Commission Act 2001 (Cth)); and Colin R Price & Associates v Four Oaks Pty Ltd [2017] FCAFC 75; 349 ALR 100 at [58] (which concerned s 51AC of the Trade Practices Act, the predecessor to s 22). Any examination of the factors set out in s 22 demonstrates that none of them could be decided adversely to the respondents on the evidence. Many are not applicable, but in part this is because the impugned conduct on the part of Crown and Aristocrat is passive in relation to the alleged “Vulnerable Players”, other than the ordinary and lawful conduct of their businesses. There is no active conduct on the part of either respondent that treats the alleged “Vulnerable Players” any differently from the first time gambler, or the regular gambler who has no difficulty controlling her or his gambling activities.

6. Second, the applicant’s case is that the unconscionable conduct of both respondents occurred in relation to gambling on Dolphin Treasure EGMs at Crown Casino. While the narrowness of that case did not substantially affect how the s 18 claim could be put, it does substantially affect how the s 21 case can be put. This is not to gainsay the point made by the applicant that s 21 is intended to be capable of applying “whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour”. That aspect of s 21 does not relieve an applicant from proving that the impugned conduct was of the required character in relation to an actual group of people: that is, proving here that some people were (and are being) exploited, or unconscientiously taken advantage of, in their gambling on the Dolphin Treasure EGMs at Crown Casino, in the circumstances alleged, and that such circumstances amounted to a “system of conduct” or “pattern of behaviour”. For the reasons I have set out elsewhere, the applicant’s evidence does not establish this to any material degree. The alleged unconscionability remains hypothetical. So too do the alleged circumstances of the contravention.

   Rejection of Aristocrat’s separate submission under s 21

7. Aristocrat makes a separate submission on the s 21 case. Relying on the decision of a Full Court of this Court in Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 at [114]-[117] (Heerey J, with whom Black CJ and Tamberlin J agreed), concerning the predecessor s 51AC of the Trade Practices Act, Aristocrat submits that s 21 concerns the relationship between suppliers of goods and services and consumers of those goods and services. It submits that the “Vulnerable Players” group members are third parties to the supply of EGMs and game software by Aristocrat to Crown and s 21 therefore has no application to Aristocrat’s conduct in supplying the EGMs to Crown.

8. I do not accept this argument. I consider Aristocrat’s conduct in supplying the EGMs to Crown, on the evidence, is capable of constituting conduct “in connection with” the supply of gambling services by Crown to members of the public, as the consumers. Especially so where it is Aristocrat which designs the Dolphin Treasure software, installs it into the EGM and configures it (including specifically to synchronise with Crown’s systems), and carries out and submits the EGM and the gambling program for initial testing and approval by the regulator. It is Aristocrat which is responsible for all of the features of the Dolphin Treasure EGM: as Crown submits, although it may request some modifications and specifications, by and large it receives the Dolphin Treasure EGM as Aristocrat manufactures and configures it. It is plain on the evidence that Aristocrat knows and intends that the “end user”, or consumer, of its product is the gambling public. If, contrary to the evidence in this case and contrary to my findings, there was a feature of an EGM such as a Dolphin Treasure that was designed to entice gamblers to continue betting by engendering a false expectation in them (such as a “true” near miss feature, as envisioned by para 3.9.57a of the National Standard, which is prohibited), then I would not accept Aristocrat could escape liability under s 21 on the basis of the principles in Monroe Topple. Members of the gambling public are the direct end users of the products designed by Aristocrat, although those products are made available for gambling by Crown. Aristocrat knows and intends its products to be used by members of the gambling public: Ms Bryant’s evidence as a whole amply demonstrates it is the gambling public that Aristocrat’s employees have in mind when designing software and hardware for EGMs, including the Dolphin Treasure.

   The introduction of near misses into the ss 20 and 21 cases

9. To a greater extent than in the s 18 case, in her final closing submissions (in writing and orally), the applicant sought to rely on the concept of near misses, and the considerable literature surrounding their effect on people’s willingness to continue gambling.

10. The applicant now contends:

    274.According to the Productivity Commission, “[a] near miss is an outcome on an EGM that is very close to the desired or winning combination (for example, having all but one winning symbols in a row, or winning symbols appearing on a line that has not been bet upon)”. This definition is consistent with the definition given by Professor Ladouceur during cross-examination:

    The way it is usually defined in the literature, saying that there few symbols align which would lead to a winning sequence. And one of them is missing as a real win. So there’s one or two depending how you define that is missing. Compared to – let’s say you need five symbols and you got three or four, you – a near miss would be three or four compared to five totally irrelevant symbols that will appear on the screen.

    275.This definition is also consistent with the literature.

    276.The Oversized Reel Feature and the Starved Reel Feature, individually and in combination, enhance the prospects of a player coming very close, but just missing out, on a winning combination across the five reels. The misleading aspects of those features are outlined in the s 18 case discussed earlier in this submission.

    277.Accordingly, the Court should find that these features effect what the literature would recognise as a “near miss”. In any event as outlined earlier in relation to the s 18 case, they distort the players’ impressions as to the probabilities of winning.

    278.Near misses are problematic because they encourage players to continue playing. The Productivity Commission said that “[n]ear misses have long been thought to induce players into believing that they have just missed a prize and that a win must be imminent, and is seen as encouraging continued play”. The Productivity Commission indicated that there were limited studies on this issue, but it ultimately said that “to the extent that such misperceptions do affect the intensity or duration of play, the Commission’s proposals in this report should help minimise any resultant harm”.

    (Footnotes omitted).

11. There is then a number of pages devoted to working through answers given by Professors Ladouceur and Nower in cross-examination on the topic of near misses, together with substantial extracts from a series of journal articles on the topic.

12. In the alternative, at the end of this part of her submissions, the applicant contends:

    Even if contrary to our submission the larger fifth reel and the unequal distribution of symbols is not equated with the near miss examples discussed in the literature, the cognitive distortion they create as to the probability of winning (outlined in the s 18 case), should be found to lead to substantially the same conclusions.

13. There is no allegation in the pleadings that the Oversized Reel Feature and the Starved Reel Feature effect a “near miss”. Indeed, the term “near miss” is not used in the pleadings at all. Nor is there any allegation that these two features create a cognitive distortion of a kind that leads to the same result in a gambler.

14. Unsurprisingly, there was vigorous objection by both respondents about the new turn taken by the applicant in closing submissions. No leave was sought to refine or further develop the applicant’s pleadings to include these allegations about near misses. I have not considered them in reaching my conclusions.

    CONCLUSIONS ON THE APPLICANT’S CAUSES OF ACTION

15. I have concluded that none of the applicant’s causes of action are made out. In relation to the s 18 allegations, I find that the Equal Reel Size and the Equal Symbol Distribution representations are not made out. Although I have found the Risk representation is made, I find that at most, it gives rise to some initial confusion or misapprehension. The making of that representation does not constitute to misleading or deceptive conduct within the terms of s 18 because any initial impression or misapprehension would be dispelled once a gambler starts using the EGM, and or alternatively looks at further information available in the form of brochures on the casino floor.

16. In relation to the ss 20 and 21 allegations, neither of these are made out, because on the evidence the conduct of Crown or Aristocrat cannot be characterised as unconscionable, whether in the meaning of the unwritten law or under s 21. Further, her claim remains at a hypothetical level in relation to the class of consumers she has chosen to identify.

    WHAT IS NOT DECIDED

    The interrelationship between the ACL and the regulatory scheme in relation to gambling

17. Subject to my findings at [515]-[519] above, it has not been necessary for me to consider the respondents’ submissions about the effects of the detailed regulatory and legislative scheme in Victoria governing the provision of EGMs, including the Dolphin Treasure, to the gambling public. If I had found the alleged representations were made, and were misleading or deceptive, or there was conduct capable of being characterised as unconscionable for the purposes of s 20 or s 21 of the ACL, or both, then it would have been necessary to consider in some detail the interrelationship between the regulatory scheme and the ACL before finally determining whether there were contraventions of those provisions. For example, in relation to the Risk representation, Ms Bryant gave evidence that, in deciding whether to approve a machine or not (or approve a new version) the regulator would be unlikely to accept any departure from the wording suggested in the National Standard about the RTP. As I have found, that wording contains the same text as the Risk representation on the Dolphin Treasure EGM. Whether these sorts of matters go only to relief rather than contravention would have been one of the complex issues to be determined. Findings of contravention would have also brought into sharp focus Crown’s submissions about s 131C. As it stands, I do not need to deal with Crown’s submissions about s 131C.

18. Although there may be other circumstances where the existence of a regulatory scheme governing conduct of a person subject to the terms of ss 18, 20 and 21 of the ACL will not prevent findings of contravention (see for instance, cases involving real estate: Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd [2016] FCA 1184; Director of Consumer Affairs Victoria v Manningham Property Group Pty Ltd [2017] FCA 1448; or cases involving legal practitioners: Australian Competition and Consumer Commission v Sampson [2011] FCA 1165; Nixon v Slater & Gordon [2000] FCA 531), in those circumstances, the impugned conduct could be said to be either implicitly prohibited by the regulatory scheme (such as underquoting on estimates for sale prices) or simply not dealt with at all by the scheme. Further, taking the real estate cases as an example, the level of prescription in the regulatory scheme is, relevantly, less. A good example of the specific nature of the overlap is the content and operation of V9.1.1 of the Victorian Appendix, which I have set out at [140] above. That requires an assessor to be satisfied, amongst other things, that the artwork on an EGM is not misleading or deceptive. Whether what appears on the screens through the “Even Reel Image” and the Dispersed Symbols Image” is artwork would have been another issue, but the potential for inconsistency as between the operation of approvals under the Victorian Appendix and the ACL is clear. The same is true of para 3.9.57 and 3.9.57a of the National Standard, which deal with “fairness”. No doubt there are arguments about the construction of these standards which may mean they do not engage with the applicant’s arguments, but all this highlights why the Court should not embark on any determination of all of these matters until a proceeding requires that to be done.

19. It would have been an issue of some complexity to determine, where a regulatory approval scheme explicitly incorporates concepts such as fairness to the users of EGMs, how a contravention of ss 18, 20 or 21 could avoid cutting across regulatory and policy choices. Perhaps that is a potential inconsistency which is simply a consequence of the operation of the ACL, perhaps not. These matters can be left for a proceeding in which they must be determined.

    The role of cognitive factors in gambling disorders and in those with difficulty controlling their gambling

20. I have not made any final findings on the applicant’s contention that there is “a cognitive aspect to disordered, problem, irresponsible or excessive gambling”. I have, at points in these reasons, assumed that proposition in the applicant’s favour (for example in examining the attributes of Vulnerable Players), because it is clear from the evidence of Professors Ladouceur and Nower that at least at a theoretical level, each of them is prepared to accept that while the causes of gambling disorder (and, it would seem, other behavioural difficulties people experience with controlling their gambling) are “multifactorial”, cognitive factors play some (presently unquantified) role.

21. For example, Professor Ladouceur gave the following evidence in cross-examination:

    Again, it’s – the cognitive factors, they play a key role. And again, I would like just to make sure that you don’t interpret my answer that this is the only factor. It’s one of the many factors”.

22. And Professor Nower said:

    I tend to not be as focused on just the cognitive aspects. So I’m much more multifactorial. So I do think the cognitive – these cognitive things are – are important, but I also think a number of other things are important. So I have a more of a – a bit of a more holistic viewpoint.

23. For reasons I have set out earlier, I have not had regard to the evidence of Professor Yücel. Dr Deighton’s evidence was consistent with the views of Professors Ladouceur and Nower, although it went further. However, given the other conclusions I have reached, there is no occasion to go further.

    The “contribution” of the identified features of the Dolphin Treasure EGM to the development or persistence of gambling disorder, or difficulties in controlling gambling activity

1. I use the term “contribution” here, in a causal sense, because causation was a central issue in the applicant’s unconscionability case.

2. I have found the applicant has not proven any unconscionability in the impugned conduct of either of the respondents. Although on one view it might be said such a finding cannot be made without an anterior finding whether there is a causal or contributory relationship between the features of the Dolphin Treasure EGM and the development of gambling disorder, or development of difficulties in controlling gambling activity, I consider the approach I have taken is open, given the particular way the applicant has framed her case and given the very particular regulatory circumstances in which the respondents’ conduct occurs.

3. I have found there is no allegation, or proof, of an individual who has been the victim of unconscionable conduct within the meaning of the unwritten law, so the threshold requirement is not met. The applicant has also failed to establish any special disadvantage, another threshold requirement that is not met. The causal issue is not reached on the s 20 case.

4. 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.

5. Whether there is a casual connection of any kind between features of an EGM machine such as the Dolphin Treasure (and whether those features identified in this case, or other features) and the development or persistence of gambling disorder, or difficulties in controlling gambling activity, is an important question of some moment well beyond the confines of this case. Unless it is necessary to decide it, I do not consider it appropriate I do so.

   Accessorial liability of Aristocrat

6. It is also not necessary to decide the question of any accessorial liability of Aristocrat for the alleged contraventions by Crown of ss 18, 20 and 21. There was no claim of accessorial liability against Crown for the conduct of Aristocrat.

   Implications of findings of contravention

7. Given the applicant’s allegations have not been upheld and no substantive relief will be granted, I do not need to express any opinion on the submissions made by the respondents that the commonness of the features of the Dolphin Treasure EGM mean that this proceeding has implications beyond the Dolphin Treasure EGM, and that “every venue which made available EGMs in Victoria with any similar features, completely unaware of how the game software determined the probabilities of a win… would be making the representation themselves in contravention of the ACL.”

   Appropriate relief

8. Nor do I need to express any view on the appropriateness of the relief sought by the applicant, and what view I may have reached about the relief sought, had I upheld the claim. The applicant’s contention (outlined in opening and closing submissions) is that Crown and Aristocrat need to make appropriate statements available to the gambling public on the machines which counteract the misleading visual impression. The applicant accepts that success in her arguments could mean that the Dolphin Treasure EGM machines should not have been approved, or should not continue to have approval under the Gambling Regulation Act because they do not satisfy the fairness requirements. The applicant also accepts that the outcome of her claim being successful is that the Court would restrain the use of an EGM by Crown at its Casino notwithstanding that use had been approved by the Victorian authorities. There are complex and difficult questions raised by relief which has these effects. Those questions should be resolved in a proceeding where it is necessary to do so.

   ORDERS AND COSTS

9. On the basis of my conclusions, the appropriate order is that the application be dismissed. There may be merit in some examination by the Commission of the current regulations, and terms of the National Standard which deal with the purpose and text of any notification to gamblers about the RTP, including the example given for the player information display. I note of course, that this proceeding only considers the previous version of the National Standard and Victorian Appendix, and not the recent 2016 and 2017 version: see [129] above.

10. I also note that, given that I have found that the information about the theoretical RTP, as provided by the player information display of the Dolphin Treasure EGM, may be confusing to players, it may be that Crown and/or Aristocrat should consider amending the wording on the screen, or providing more information on the talkers. As para 1.3.2(a) of the National Standard indicates, the Standard (and therefore the sample player information display in the Standard) is not intended to impose a single solution or method of realising an objective, including the Standard’s fairness objectives. The 2016 National Standard contains a similar statement: namely, that it is not drafted so as to limit or encourage any particular technology or implementation: para 1.8.

11. The parties will be given an opportunity to propose orders reflecting my reasons on the s 37AF application above.

12. The parties will also be given an opportunity to make submissions on costs, including whether there should be an order for lump sum costs.

I certify that the preceding five hundred and fifty-seven (557) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.

Associate:

Dated:       2 February 2018