Ng v McLauchlan

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0055

ALLEN NG	Applicant
v
DAVID IAN MCLAUCHLAN	Respondent

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JUDGES:	KENNEDY, MACAULAY and LYONS JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	29 April 2024
DATE OF JUDGMENT:	10 July 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 160
JUDGMENT APPEALED FROM:	[2023] VCC 483 (Judge Trapnell)

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GAMING AND BETTING – Statutory interpretation – Authorisation of gambling – Breach of r 4.2 of the Bookmakers’ Telephone Betting Rules 2001 (‘Telephone Betting Rules’) – Telephone bets placed without signed authority of client and without lodging authority with Racing Victoria – Gambling unauthorised unless authorised – Whether bet placed in breach of r 4.2 of Telephone Betting Rules is ‘unauthorised gambling’ – Wagering agreement void if related to ‘unauthorised gambling’ – Telephone bet in breach of r 4.2 of the Telephone Betting Rules is ‘unauthorised gambling’ and underlying agreement void under s 2.4.1 of Gambling Regulation Act 2003 – Leave to appeal granted – Appeal allowed.

Gambling Regulation Act 2003, ss 1.1(2), 2.2.1, 2.2.2, 2.4.1; Racing Act 1958, ss 4, 4A; Bookmakers’ Telephone Betting Rules 2001, rr 4.1, 4.2.

Project Blue Sky Inc v Australian Broadcasting Authority (1988) 194 CLR 355, applied.

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Counsel
Applicant:		Mr M Clarke KC with Ms V Plain
Respondent:		Mr D Sheales with Mr T Purdey
Solicitors
Applicant:	Lim & Tng
Respondent:	Aintree Group Legal

KENNEDY JA
MACAULAY JA
LYONS JA:

Introduction

This application concerns the entitlement of a registered bookmaker, Mr David McLauchlan (the ‘respondent’), to recover $150,000 for unpaid telephone bets placed by Mr Allen Ng (the ‘applicant’) on 14, 15 and 18 April 2020 (the ‘relevant telephone bets’). This is in circumstances where the respondent admitted that he failed to obtain a signed authorisation to accept telephone bets from the applicant and failed to lodge that form with Racing Victoria Limited (‘Racing Victoria’) in breach of rr 4.1 and 4.2 of the Bookmakers’ Telephone Betting Rules 2001 (the ‘Telephone Betting Rules’) (the ‘r 4 breaches’).
The determination of that entitlement depends upon the proper interpretation of relevant provisions of statutes and subordinate instruments relating to gambling and the racing industry in Victoria and, ultimately, whether the relevant telephone bets were ‘unauthorised gambling’ with the result that the underlying agreements relating to those bets are void pursuant to s 2.4.1 of the Gambling Regulation Act 2003 (the ‘Gambling Act’).
A judge of the County Court found that the respondent was entitled to recover the debts relating to the relevant telephone bets, concluding that these bets did not constitute ‘unauthorised gambling’ under the Gambling Act, notwithstanding the r 4 breaches.[1] The applicant now seeks leave to appeal and (if leave is granted) to appeal from that decision.
[1]McLauchlan v Ng [2023] VCC 483, [65] (Judge Trapnell) (‘Reasons’).
For the reasons that follow, we have concluded that, by reason of the failure to comply with r 4.2 of the Telephone Betting Rules, the relevant telephone bets constituted ‘unauthorised gambling’ under the Gambling Act with the result that the underlying agreements relating to them are void. It follows that leave must be granted and the appeal allowed.

The legislative scheme

Before setting out the facts in more detail, it is appropriate to set out the relevant legislative provisions relating to telephone betting, namely the Gambling Act, the Racing Act 1958 (the ‘Racing Act’), and the Telephone Betting Rules.

The Gambling Act

The main purpose of the Gambling Act, as set out in s 1.1(1), is ‘to re-enact and consolidate the law relating to various forms of gambling’. ‘Gambling’ is defined in s 1.3AA(1) to include, in effect, wagering. It is common ground that by placing and accepting the relevant telephone bets the parties engaged in ‘wagering’,[2] and therefore, ‘gambling’ as defined in the Gambling Act.
[2]The Gambling Regulation Act 2003 defines ‘wagering’ as ‘pari-mutuel betting on a horse race, harness race or greyhound race’: s 1.3(1) (definition of ‘wagering’) (‘Gambling Act’).
Section 1.1(2) sets out a number of ‘main objectives’ of the Gambling Act including:
(a)to foster responsible gambling in order to—
(i)minimise harm caused by problem gambling; and
(ii)accommodate those who gamble without harming themselves or others;
(ab)to ensure that minors are neither encouraged to gamble nor allowed to do so;
….
(c)to ensure that the management of gaming equipment and monitoring equipment is free from criminal influence and exploitation;
(d) to ensure that other forms of gambling permitted under this or any other Act are conducted honestly and that their management is free from criminal influence and exploitation; …
Chapter 2 of the Gambling Act is headed ‘General prohibitions and authorisations’. The purposes of ch 2 are set out in s 2.1.1 as follows:
(a)to prohibit unauthorised gambling; and
(b)to authorise certain types of gambling; and
…
(c)to prohibit the advertising of unauthorised gambling; and
(d)to void contracts and agreements relating to unauthorised gaming or wagering; and
(e)to prohibit the provision of places for unauthorised gambling; and
(f)to provide for the banning of irresponsible gambling products and practices.
Part 2 of ch 2 of the Gambling Act is headed ‘Gambling’. Division 1 of that pt is headed ‘Unauthorised gambling’ and div 2 is headed ‘Authorised gambling’. Section 1.3(1) of the Gambling Act defines ‘unauthorised gambling’ to mean ‘gambling that is not authorised by or under this Act or another Act’.
Division 2 of pt 2 authorises several kinds of gambling activities including providing authorisation for the following: games at amusement centres, fetes, carnivals; two-up on ANZAC Day; betting games on approved foot or bicycle races; and the Calcutta Sweepstakes. Each authorisation is subject to conditions, where failure to comply would mean the gambling activity is ‘unauthorised’ — and prohibited as a result.
Other provisions then deal with the consequences of engaging in unauthorised gambling. Returning to div 1 of ch 2 (unauthorised gambling), s 2.2.1(1) provides:
2.2.1 Prohibition against unauthorised gambling
(1)A person must not conduct unauthorised gambling.
Penalty: 1000 penalty units or imprisonment for 2 years or both.
Relevantly, s 2.2.2 of the Gambling Act is headed ‘Recovery of money lost in unauthorised gambling’. Sections 2.2.2(1) and (3) provide, in substance, that a person who has paid or staked money or other valuable consideration (the ‘participant’) in unauthorised gambling may recover that money or other valuable consideration (or the value of the valuable consideration).[3] Section 2.2.2(2) provides that each person who has conducted the unauthorised gambling is jointly and severally liable to the participant.
[3]For completeness, the participant does not ‘conduct’ unauthorised gambling for the purposes of s 2.2.1(1) merely because the participant participates in unauthorised gambling: s 2.2.1(3) of the Gambling Act.
Further, under pt 4 of the Gambling Act, headed ‘Gaming or wagering agreements’, s 2.4.1 provides:
2.4.1 Unauthorised gaming or wagering contracts are void
A gaming or wagering contract or agreement (whether written or not) is void if the gaming or wagering to which it relates is unauthorised gambling.
It is common ground that the placing of a bet is the relevant wagering contract or agreement.

The Racing Act

The Racing Act does not contain specific provisions with respect to its purpose(s) or object(s). However, the long title of the Racing Act is ‘An Act to consolidate the Law relating to Horse Pony Trotting and Greyhound Racing, the Registration of Bookmakers and their Clerks, and Totalizators’.
Part 1 of the Racing Act is headed ‘Race-courses and race-meetings’. Division 2 of pt 1 is headed ‘Legality of betting’. Its provisions do not, in terms, ‘authorise’ particular forms of gambling. Instead, as will be seen, they provide for a method of betting which does not contravene the Gambling Act. It is clear from the terms of its provisions, however, that the lawfulness of the betting is synonymous with it being ‘authorised’ for the purpose of the Gambling Act. That is the way in which the parties to this application approached the meaning of its provisions, and in our view they were correct to do so.
Section 4 of the Racing Act appears in div 2 of pt 1 of that Act. Section 4 relevantly provides:
4 Betting with registered Bookmaker
(1)Despite anything in the Gambling Regulation Act 2003 (except Divisions 5 and 6 of Part 5 of Chapter 4) or any other law, it is not a contravention of that Act or law, and a racecourse or an approved off-course premises is not a place provided for the purposes of unauthorised gambling within the meaning of Chapter 2 of that Act, if a person bets by way of wagering—
(a)on any horse race, harness race or greyhound race; or
(b)on any approved betting event—
** * * *
in accordance with this section.
(2)The racecourse must be licensed under this Part.
(3)The bet must be made—
(a)with a registered bookmaker; or
(b)with an approved substitute—
who is present on the racecourse or approved off-course premises at the time the bet is made.
(4)The bet must be made—
(a)during the holding of a race meeting at the racecourse by a person present on the racecourse with a registered bookmaker or approved substitute present on the racecourse; or
(b)at any time by a person using a method of communication approved by the Minister under section 4A.
(5)In this section, a reference to a racecourse licensed under this Part includes a reference to land otherwise authorised for the holding of race meetings under this Part or Part III.[4]
[4]Emphasis in original.
The effect of s 4 of the Racing Act is that, if ss 4(2) to (3) are satisfied, an off-course bet by way of wagering on a horse-race is not unlawful (and is thus authorised under the Gambling Act) if it is made with a registered bookmaker using a method of communication approved by the Minister, in accordance with s 4(4)(b). It is not in contention that the requirements in ss 4(2)–(3) were satisfied in the present case. Rather, the issue is whether the relevant telephone bets placed by the applicant with the respondent were made using ‘a method of communication approved by the Minister under section 4A’ as required by s 4(4)(b) of the Racing Act.
Section 4A of the Racing Act provides:
4A Methods of remote betting
(1)The Minister, by notice published in the Government Gazette, may approve a method of communication which may be used by registered bookmakers or approved substitutes to accept bets from persons.
(2)The Minister may give approval for any period and on any conditions that the Minister thinks fit and may vary or withdraw any approval so given.

The Ministerial approval

The Victorian Government Gazette dated 26 October 2010 and published 28 October 2010[5] sets out the conditions on the Minister’s approval of telephone betting as a method of communication under s 4A of the Racing Act (the ‘Ministerial approval’) as follows:[6]
[5]A previous version of the Ministerial approval from 2009 (Victorian Government Gazette, No. G 8, 19 February 2009) was before the judge, however the correct version dated 26 October 2010 was relied on by agreement on the hearing of this application.
[6]Victorian Government Gazette, No. S 439, 28 October 2010 (emphasis in original).
Racing Act 1958
APPROVAL OF METHODS OF COMMUNICATION FOR BOOKMAKERS TO ACCEPT BETS
Under section 4A of the Racing Act 1958, the following methods of communication may be used by registered bookmakers or approved substitutes to accept bets from persons not present on the racecourse on which the bookmaker is carrying on business.
1.A telephone betting system approved and certified by Racing Victoria (within the meaning of the Racing Act 1958) in accordance with Racing Victoria’s Bookmakers’ Telephone Betting Rules 2001 and operated in compliance with the terms and conditions set by those Rules is an approved method of communication which may be used by registered bookmakers or approved substitutes to accept bets from persons not present on the racecourse on which the bookmaker is carrying on business.
2.Communications by telephone utilising the dedicated PABX system with mobile telephone extensions and associated voice recording equipment installed at the premises of Racing Victoria (within the meaning of the Racing Act 1958) on exchange numbers (03) 9214 0000 to (03) 9214 0199 inclusive and (03) 9214 0500 to 9214 0599 inclusive and is subject to the following conditions:
(i)all telephone communications to be voice recorded;
(ii)all communication records are to be retained for a minimum of 28 days;
(iii)immediate, unlimited and unqualified access to communication records must be provided to the Victoria Police and Victorian Commission for Gambling Regulation; and
(iv)all betting transactions and communications must be conducted in accordance with Racing Victoria’s Bookmakers’ Telephone Betting Rules 2001.
This approval is subject to any amendment of the Bookmakers’ Telephone Betting Rules 2001 not coming into operation until it has been approved by the Minister responsible for the Racing Act 1958.
Dated 26 October 2010
ROB HULLS MP
Minister for Racing
It is compliance with condition (iv) in para 2 (hereafter ‘condition (iv)’) which is in issue in the present case.

Telephone Betting Rules

The Telephone Betting Rules,[7] subtitled the ‘Terms and Conditions for Use by Bookmakers of a Telephone Betting System’, were made by Racing Victoria.
[7]Effective 15 December 2016.
The purpose of the Telephone Betting Rules, as stated in r 1.2, is to ‘set the terms and conditions upon which Bookmakers may use the method of telephone communication approved by the Minister for Racing pursuant to section 4A of the Racing Act’.[8]
[8]Emphasis added.
Rules 1.3 and 1.4 provide:
1.3These Rules are made pursuant to the approval given by the Minister for Racing pursuant to section 4A of the Racing Act.
1.4These Rules are subject to subject to the terms and conditions specified by the Minister for Racing pursuant to section 4A of the Racing Act.
‘Telephone Betting System’ is defined in r 2.1 to mean ‘the system or systems approved by the Minister pursuant to section 4A of the Racing Act and operated by Racing Victoria (or as approved by Racing Victoria)’. Further, r 2.2 provides in summary that, unless the context requires to the contrary, words and expressions used in the Telephone Betting Rules have the meaning ascribed to them in the Racing Act and the Club Bookmakers’ Licence Rules 2010 (the ‘Club Licence Rules’) and that the Rules ‘shall be interpreted in accordance with the provisions of the [Interpretation of Legislation Act 1984]’.
The Telephone Betting Rules contain six substantive provisions, including the following:
(a)Rule 3 (headed ‘Telephone Betting Systems’) which, among other things, prohibits a bookmaker from engaging in betting activity over the telephone (excluding for the purpose of betting back) unless the bookmaker uses a prescribed ‘Telephone Betting System’[9] and has applied for and obtained express approval from Racing Victoria;
(b)Rule 5 (headed ‘Recording of telephone calls’) which, among other things, provides that bookmakers acknowledge and are to inform their clients that Racing Victoria will record all incoming calls made over a Telephone Betting System;
(c)Rule 6 (headed ‘Conduct of betting over the Telephone Betting System’) which contains various rules concerning when, where and how bets may be received using a Telephone Betting System;
(d)Rule 7 (headed ‘Recording and reporting’) which requires, among other things, the bookmaker to record all bets made using a Telephone Betting System, together with the client’s full name and, as required, to provide ‘all information relating to bets’ to the ‘Controlling Body’[10] or the ‘Betting Supervisor’; and
(e)Rule 8 (headed ‘Exclusion from a Telephone Betting System’) which provides that the bookmaker acknowledges and agrees that upon any breach of the Telephone Betting Rules (together with other rules, including the Club Licence Rules), the Controlling Body may prohibit the bookmaker from using the Telephone Betting System.
[9]‘Telephone Betting System’ is defined to mean the ‘system or systems approved by the Minister pursuant to section 4A of the Racing Act and operated by Racing Victoria (or as approved by Racing Victoria)’. See paras 1 and 2 of the Ministerial approval set out at [20] above.
[10]See footnote 11 below.
Rule 4 is headed ‘Bookmakers to provide up-to-date client lists’ and provides as follows:
4.       BOOKMAKERS TO PROVIDE UP-TO-DATE CLIENT LISTS
4.1     Client List
Unless otherwise expressly authorised by the relevant Controlling Body, every Bookmaker must lodge with the Betting Supervisor of the Controlling Body, in the form prescribed by that Controlling Body, names, addresses and dates of birth of all clients and their authorised agents from whom the Bookmaker accepts bets using a Telephone Betting System while fielding at a venue or venues under the control of the Controlling Body, and promptly advise the Betting Supervisor of the Controlling Body of all new clients so that the list is always current and up-to-date.
4.2     Written Authority
(a)Unless otherwise expressly authorised by the relevant Controlling Body, prior to a Bookmaker conducting any betting transactions with a client using a Telephone Betting System, the Bookmaker must obtain a written authority from the client authorising the Bookmaker to accept bets from the client or the client’s authorised agent. The written authority must disclose the full name, address and date of birth of the client and any person that is authorised by the client to conduct betting transactions for and on behalf of the client.
(b)Except where otherwise expressly authorised by the relevant Controlling Body, a Bookmaker must not accept bets using the Telephone Betting System from any person unless:
(i)the person placing the bet has signed and completed the written authority referred to in Rule 4.2(a) or is the authorised agent of a client as disclosed in the written authority and is transacting the bet on behalf of his or her principal; and
(ii)the Bookmaker has first lodged with the Controlling Body a true and complete copy of the person’s signed and completed written authority.
There was no evidence that the respondent received authorisation from Racing Victoria as the ‘Controlling Body’[11] exempting him from complying with the requirements of r 4.

Written authority — the ‘Bookmaker Client Account Form’

[11]Racing Victoria is the ‘Controlling Body’ in the case of horse racing: Racing Act 1958, s 3 (definition of ‘controlling body’ para (a)).

The parties’ arguments proceeded on the basis that the ‘form prescribed by’ Racing Victoria, as the Controlling Body, referred to in r 4.1 was a document titled ‘Bookmaker Client Account Form’,[12] and that it also served as the form of ‘written authority’ for the purpose of r 4.2 of the Telephone Betting Rules (the ‘signed r 4 authority’). The form contains four sections.
[12]The version in the court book is dated July 2019.

Section 1 headed ‘Background Information’ reads:
This Bookmaker Client Account Form is to be used by Bookmakers to advise the details of client accounts to Racing Victoria as required by:
•Club Bookmakers’ Licence Rules 2010 (Rule 15)
•Bookmakers’ Telephone Betting Rules 2001 (Rule 4) and;
•Bookmakers’ Internet Betting Rules 2001 (Rule 8)
Section 2 is headed ‘Bookmaker’s Details’ and contains boxes for the bookmaker’s name and licence number.
Section 3 is headed ‘Client Details’ and contains boxes for the client’s full name, date of birth, residential and postal addresses, home, work and mobile telephone numbers, and email address.
Section 4 is headed ‘Client Authority (for Telephone Accounts) and Authorised Agent Details’ and reads as follows:[13]
[13]Emphasis in original.
In accordance with Bookmakers Telephone Betting Rule 4, Bookmakers who wish to accept bets from the above client using the Telephone Betting System must ensure the client completes and signs the following authority:
I hereby authorise _________________________________ (Bookmaker)
to accept bets from me or from my authorised agent (detailed below).

Client Name

Client Signature

Date

The facts

As noted above, the facts are not in dispute. The following summary is drawn from the Reasons.
At the relevant time, the respondent had been a registered bookmaker for 49 years and a rails bookmaker for 30 years.[14] The applicant was, in the judge’s opinion, ‘a very experienced and active punter’.[15]
[14]Reasons, [2].
[15]Ibid [76].
Between 1 February 2020 and 18 April 2020 (inclusive), the applicant placed a number of bets with the respondent on credit, with over 270 being placed by telephone.[16] At no time did the respondent obtain a completed Bookmaker Client Account Form signed by the applicant authorising the respondent to accepts telephone bets from the applicant (i.e. the signed r 4 authority).[17]
[16]Ibid [2], [42].
[17]Ibid [30(j)].
On 14, 15 and 18 April 2020, the applicant placed the relevant telephone bets with the respondent totalling $152,000 of which he only paid $2,000 to the respondent.[18] When the applicant refused to pay the outstanding $150,000, the respondent issued the proceeding in the County Court to recover the monies owing by way of debt.
[18]Prior to the dates in issue, the respondent paid out a total of $104,894.50 to the applicant for bets that the applicant won. The applicant paid the respondent a total of $88,600.00 for bets that he lost: See ibid [4]–[5].
Relevantly, the applicant defended the proceeding on the basis that the relevant telephone bets were ‘unauthorised gambling’ and thus void and unenforceable pursuant to s 2.4.1 of the Gambling Act. The applicant alleged that the relevant telephone bets were not placed using a method of communication approved by the Minister under s 4A of the Racing Act by reason of the r 4 breaches. At the trial, which took place over two days in August 2022, the respondent admitted the r 4 breaches.[19]
[19]Ibid [30(j)], [34].
It is appropriate to set out the findings of the judge recorded in the Reasons:
(a)At all relevant times [the respondent] was a registered bookmaker fielding during the holding of various horse race meetings licensed under Victorian law.
(b) All of [the respondent]’s betting interactions with [the applicant] occurred either on racecourses licensed under Part I of the Racing Act or at approved off-course premises.
(c)Between 1 February 2020 to 18 April 2020 (both inclusive), [the applicant] bet by way of wagering on horse races with [the respondent] as set out in the ‘Statement of Activity’ annexed to the statement of claim and the document described in the court book index as ‘Racing Victoria — Recorded Wagers taken by [the respondent] from [the applicant] (‘the betting records’). These bets are itemised in the materially agreed Chronology.
(d)The bets were made by [the applicant] with [the respondent] at times when the latter was present on a racecourse or at approved off-course premises.
(e)The betting records disclose [the applicant]’s net position at the end of 18 April 2020 was that his losing bets over the period 14 to 18 April 2020 exceeded his winning bets over that period by $152,000.
(f)On 21 September 2020, [the applicant] paid [the respondent] $2,000.
(g)There is no suggestion the bets were not properly recorded with Racing Victoria or that any levy payable on the bets has not been paid.
(h)The bets the subject of this proceeding were made by telephone to which the Telephone Betting Rules applied.
(i)The Licence Rules, Telephone Betting Rules and the Code applied to [the respondent] as a registered bookmaker. Specifically, rules 10.1 and 10.2 of the Licence Rules applied to [the respondent].
(j)[The respondent] did not obtain a signed Bookmaker Client Account Form from [the applicant] or lodge same with Racing Victoria.
(k)On 26 February 2020, [the respondent] provided a copy of the [applicant]’s Victorian driver licence to stewards of Racing Victoria at Sandown Racecourse.[20]
[20]Ibid [30] (citations omitted).
The judge also accepted the respondent’s unchallenged evidence that:
(a)Before receiving any credit bets from [the applicant], [the respondent] obtained [the applicant]’s name, address, banking details, email address and mobile telephone number, which he entered into a computer at a racecourse using a software program provided by a supplier approved by Racing Victoria. This computer was linked to Racing Victoria via an intranet. This action was necessary in order to obtain a code required by Racing Victoria to create a credit betting facility for [the applicant].
(b)[The respondent] added [the applicant]’s date of birth to this computer record after he obtained a copy of [the applicant]’s driver licence on 26 February 2020.
(c)At all relevant times, Racing Victoria could access these computer records.[21]
[21]Ibid [31] (citations omitted).

The Reasons

By the Reasons delivered on 31 March 2023, the judge found in favour of the respondent and, on 24 April 2023, ordered that the applicant pay the respondent $150,000 plus interest and costs.
In summary, the judge held that the relevant telephone bets did not constitute ‘unauthorised gambling’ because:
(a)the r 4 breaches did not have the effect that the ‘method of communication’ used to make those bets was not approved by the Minister under s 4A of the Racing Act;[22]
(b)it could not have been the intention of the legislature that minor infractions of the Telephone Betting Rules (such as the r 4 breaches) had the result that the method of communication was not authorised by the Minister for the purpose of s 4A of the Racing Act as a consequence of which the relevant telephone bets were ‘unauthorised gambling’;[23] and
(c)in any event there was substantial compliance with rr 4.1 and 4.2 because in order to take the relevant telephone bets, the respondent caused the applicant’s personal details to be entered into a computer program controlled by Racing Victoria.[24]
[22]Ibid [65].
[23]Ibid [62]–[63].
[24]Ibid [51].
At [32] to [66] of the Reasons, the judge addressed whether the relevant telephone bets were ‘unauthorised gambling’ under the Gambling Act based on the respondent’s submission that they were in fact authorised by ‘another Act’, being s 4 of the Racing Act. In considering s 4, the judge accepted that the relevant telephone bets had been placed using the method of communication approved by the Minister under s 4A, namely ‘the dedicated PABX system with mobile telephone extensions and associated voice recording equipment installed at the premises of Racing Victoria on certain listed exchange numbers’.[25]
[25]Ibid [39]–[40].
However, the judge noted that the Ministerial approval of this method of communication is subject to certain conditions, in particular condition (iv), which requires ‘all betting transactions and communications must be conducted in accordance with [the Telephone Betting Rules]’.[26]
[26]Ibid [41].
The judge then correctly identified the question for him to decide as follows:
42The question for me is, whether [the respondent]’s admitted breaches of rules 4.1 and 4.2 of the Telephone Betting Rules have the consequence that all bets placed by [the applicant] with him are void and unenforceable as constituting ‘unauthorised gambling’ because, in breach of the aforementioned condition, the bets were not made using a method of communication approved by the Minister and, for that reason alone, the bets were not ‘authorised’ under s 4 of the Racing Act…
As to his analysis of this question, the judge first noted that the consequence of finding the relevant telephone bets were ‘unauthorised gambling’ is that, pursuant to s 2.2.1(1) of the Gambling Act, the respondent would have committed a criminal offence in respect of each of over 270 bets, in circumstances where each offence is punishable by a maximum penalty of a $165,220 fine and/or 2 years’ imprisonment.[27] The judge expressed the view that:
43This would be an extraordinary and wholly disproportionate outcome for a failure to obtain a signed form and lodge it with the appropriate body. In my view, it is an outcome that could not have been intended by the legislature. No statutory provision or rule expressly provides for such an outcome. Moreover, the Licence Rules and the Telephone Betting Rules, while authorised by the Racing Act, do not have the same status as regulations made under that Act.[28]
[27]Ibid [42].
[28]Citations omitted.
Second, the judge addressed the respondent’s submission that attempted to draw a distinction between the rules in the Telephone Betting Rules that relate ‘to opening a betting account and those relating to the conduct of telephone betting transactions’.[29] The judge accepted the respondent’s submission that, while the appropriate form (i.e. the Bookmaker Client Account Form) was not obtained and lodged when the applicant’s betting account was opened, each individual telephone bet was placed by the applicant with the respondent using the ‘dedicated Racing Victoria system’, which meant that every bet was recorded by the respondent, including with reference to the applicant’s full name as the client and that it was a telephone bet, in accordance with the Telephone Betting Rules.[30]
[29]Reasons, [49].
[30]Based upon the document in the application book titled ‘Racing Victoria — Recorded Wagers taken by David McLauchlan from Allen Ng’. In this regard, the judge also cited the evidence of Mr Durrant, a senior wagering administrator and betting supervisor employed at Racing Victoria. See ibid [49]–[50].
In this context, the judge went on to conclude that:
51Moreover, I accept that, while there was not full compliance with the [Club Licence Rules] and the [Telephone Betting Rules], there was substantial compliance with those rules. [The respondent] had verified the [applicant’s] identify [sic] and shown that verification to a betting supervisor well before engaging in the wagering the subject of this proceeding.
Third and relatedly, the judge addressed the respondent’s submission that this had the effect that ‘all betting transactions and communications’ (meaning the actual placing of the bets) were conducted in accordance with the Telephone Betting Rules and, therefore, condition (iv) of the Ministerial approval had been complied with. The effect of this submission was that a failure to open the applicant’s betting account in accordance with the Telephone Betting Rules did not mean that the betting transactions and communications were not authorised under the Racing Act. In this context, the judge accepted that the respondent may face disciplinary action by Racing Victoria or the stewards for his admitted breaches of the Club Licence Rules and/or the Telephone Betting Rules.[31]
[31]Ibid [52]–[53].
Fourth, the judge then turned to the Ministerial approval, which he considered formed ‘an integral part’ of the statutory provisions and rules that inform whether a person has conducted ‘unauthorised gambling’ and, ‘thereby, committed the actus reus of an offence under s 2.2.1(1)’.[32] The judge continued:
54In this sense, the [Ministerial approval] of the method of communication for remote betting has a penal element. If the method of communication is not an approved one, the wagering is not authorised under s 4 of the Racing Act and, unless it is otherwise authorised, would satisfy the element of being ‘unauthorised gambling’ for an offence under s 2.2.1(1) of the Gambling Act.
[32]Ibid [54].
The judge referred to the submissions of the parties filed after the hearing addressing the applicability or otherwise of the principle in Beckwith v The Queen (‘Beckwith’)[33] to the effect that any ambiguity in the meaning and content of a statutory term which imposes a criminal penalty should be resolved in favour of the alleged perpetrator.[34]
[33](1976) 135 CLR 569, 576 (Gibbs J); [1976] HCA 55.
[34]Reasons, [55].
The judge accepted that the authorities emphasised that the rule of statutory construction in Beckwith is a rule of last resort.[35] The judge concluded as follows:[36]
[35]Ibid citing Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 102–3 (Toohey, Gaudron and Gummow JJ); [1997] HCA 53; Aubrey v The Queen (2017) 260 CLR 305, 325–326 [39] (Kiefel CJ, Keane, Nettle and Edelman JJ); [2017] HCA 18.
[36]Emphasis in original.
56The words ‘unauthorised gambling’ are to be construed consistently under the Gambling Act as they are defined in s 1.3 for the purposes of the Act. Therefore, the words used in s 2.2.1(1) must have the same meaning and content as the words used in s 2.4.1 of the Act. Accordingly, the rules of construction referred to above must be consistently applied in this case.
57 Recently, Kiefel CJ and Keane J in R v A2[37] summarised the Beckwith principle as follows:
[37](2019) 269 CLR 507; [2019] HCA 35.
A statutory offence provision is to be construed by reference to the ordinary rules of construction. The old rule, that statutes creating offences should be strictly construed, has lost much of its importance. It is nevertheless accepted that offence provisions may have serious consequences. This suggests the need for caution in accepting any ‘loose’ construction of an offence provision. The language of a penal provision should not be unduly stretched or extended. Any real ambiguity as to meaning is to be resolved in favour of an accused. An ambiguity which calls for such resolution is, however, one which persists after the application of the ordinary rules of construction.[38]
[38]Ibid 525–526 [52] (citations omitted).
…
62In my opinion, whilst the words of s 2.2.1(1) are superficially clear and unambiguous, this begs the question of how widely the term ‘unauthorised gambling’ is to be construed. Is it intended by the legislature that relatively minor infractions of the Telephone Betting Rules has the result that the method of communication is not authorised by the Minister, leading to the consequence the wagering is not authorised under s 4 of the Racing Act and therefore constitutes ‘unauthorised gambling’? I consider this is not an intended outcome.
63Had the Minister intended that any infraction of the Telephone Betting Rules, no matter how minor, would result in the method of communication used by the bookmaker to accept the bet was not a ‘method approved by the Minister’ under s 4(4)(b) of the Racing Act, he or she could have made this clear in the notice published in the Government Gazette.
64In this context, it is instructive to compare the wording of the notice relating to telephone betting with the notice relating to internet betting. The latter notice provides:
Under section 4A of the Racing Act 1958, an internet betting system approved and certified by Racing Victoria (within the meaning of the Racing Act 1958) in accordance with Racing Victoria’s Bookmaker’s Internet Betting Rules 2001 and operated in compliance with the terms and conditions set by those Rules is an approved method of communication which may be used by registered bookmakers or approved substitutes to accept bets from persons not present on the racecourse on which the bookmaker is carrying on business.
This form of notice makes it clear that operational compliance with the ‘terms and conditions’ of Racing Victoria’s Bookmaker’s Internet Betting Rules 2001 is an essential element of the Minister’s approval of this method of communication.
65Accordingly, I conclude that [the respondent]’s admitted failure to obtain a Bookmaker Client Account Form from [the applicant] and lodge it with Racing Victoria in breach of the Telephone Betting Rules does not have the effect that the method of communication used by [the respondent] to make ‘the bets’ was not one approved by the Minister under s 4A of the Racing Act. In my opinion, all bets the subject of these proceedings were authorised under s 4 of the Racing Act, and for that reason, the bets were not made in contravention of the Gambling Act and they did not involve ‘unauthorised gambling’ under the Gambling Act.
Finally, the judge noted that the question of whether the respondent had committed a disciplinary offence by reason of the r 4 breaches was not relevant to his determination of the issues in the case, and he made no finding to that effect.[39]
[39]Reasons, [66].

Proposed ground of appeal and contentions

The applicant’s proposed ground of appeal challenges the judge’s conclusion that in light of the r 4 breaches, the relevant telephone bets were not, or were not related to, ‘unauthorised gambling’ within the meaning of s 2.4.1 of the Gambling Act. The proposed ground is:
1. The trial judge erred in construing that bets made by telephone without signed written authority from the person placing the bets in breach of Rules 4.1 and 4.2 of the Bookmaker Telephone Betting Rules 2001 (Victoria) were nevertheless authorised under the Racing Act 1958 (Vic) and were not related to ‘unauthorised gambling’ within the meaning of s 2.4.1 of the Gambling Regulation Act 2003 (Vic).
(i)The trial judge erred in finding:
(a)The bets by telephone were authorised under ss 4 and 4A of the Racing Act 1958 (Vic) and the approval of the Minister published in the Government Gazette, even though the conditions of that approval had not been satisfied in that the Bookmaker Telephone Betting Rules 2001 had not been complied with;
(b)Breaches of the Bookmaker Telephone Betting Rules 2001 (Victoria) attract criminal penalties which are out of all proportion to the breach (which is irrelevant);
(c)The legislature did not intend for the telephone bets made in breach of Rules 4.1 and 4.2 of the Bookmaker Telephone Betting Rules 2001 (Victoria) to have the result that the method of communication be not authorised by the Minister leading to the consequence that the wagering is not authorised under the Racing Act 1958 (Vic) and constitutes unauthorised gambling and is therefore void;
(d)There had been substantial compliance with the Bookmaker Telephone Betting Rules 2001;
(ii)The trial judge erred in failing to consider the meaning of the word ‘must’ in:
(a)The approval of the Minister;
(b)Rules 4.1 and 4.2 of the Bookmakers Telephone Betting Rules; and
(c)Rules 10.2 and 15.2 of the Club Bookmakers Licence Rules.
The applicant’s contentions
In summary, the applicant submitted that the judge erred in concluding the relevant telephone bets were not ‘unauthorised gambling’ because:
(a)by reason of the r 4 breaches, there was non-compliance with condition (iv) of the Ministerial approval;
(b)as a result of (a), the relevant telephone bets were not made using a method of communication approved by the Minister under s 4A of the Racing Act as required by s 4 of that Act; and
(c)as a result of (b), the relevant telephone bets were not authorised under the Racing Act and thus constituted ‘unauthorised gambling’ under the Gambling Act.

The applicant focused on the construction of the provisions of the Gambling Act and the Racing Act relying, in particular, on the main objectives of the Gambling Act in ss 1.1(2)(c)–(d) (set out at [7] above). In this context, counsel for the applicant submitted that the r 4 breaches (but most relevantly the breach of r 4.2) lead to the conclusion that the relevant telephone bets were unauthorised under the Racing Act and thus ‘unauthorised gambling’ under the Gambling Act. This was based upon the language of the Ministerial approval and rr 4.1 and 4.2 of the Telephone Betting Rules.
As to the language of the Ministerial approval, the applicant contended that authorisation for the relevant type of gambling was subject to the conditions in para 2 of the Ministerial approval being satisfied, relevantly condition (iv). In particular, this was reflected by the use of the mandatory ‘must’ in condition (iv) of the Ministerial approval.
As to the language of the Telephone Betting Rules, the applicant’s counsel referred again to the use of the word ‘must’ in rr 4.1 and 4.2, with particular emphasis on the use of ‘must’ in r 4.2 and most particularly r 4.2(b), as follows:
(a)in r 4.2(a) — ‘prior to a Bookmaker conducting any betting transaction with a client using a Telephone Betting System, the Bookmaker must obtain a written authority from the client authorising the Bookmaker to accept bets ...’ and
(b)in r 4.2(b) — ‘a Bookmaker must not accept bets using the Telephone Betting System from any person unless’ (i) the client had completed and signed the written authority; and the bookmaker had (ii) lodged a true and complete copy of it with the Controlling Body, i.e. Racing Victoria.
The applicant submitted that the judge did not have regard to his submissions on these matters, highlighting that the word ‘must’ is mandatory and does not confer a discretion.[40] In these circumstances, the applicant submitted that the legislature plainly intended to achieve the purposes in the Gambling Act and to render the relevant telephone bets, in light of the r 4 breaches, void pursuant to s 2.4.1 of the Gambling Act.[41]
[40]Relying upon DPP v Dickfoss (2011) 249 FLR 374, 395 [87] (Mildren J); [2011] NTSC 4.
[41]Relying upon Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 384 [78] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28 (‘Project Blue Sky’).
The applicant emphasised that the respondent was not challenging the validity of the Ministerial approval within the context of s 4A of the Racing Act with the result that this case was substantially different from the factual situation in Project Blue Sky Incv Australian Broadcasting Authority (‘Project Blue Sky’).[42]
[42]Ibid.
Even if there might be room for argument that other provisions of the Telephone Betting Rules did not relate to ‘betting transactions and communications’, by reason of the language used in rr 4.1 and 4.2, the applicant submitted that those rules were directed to ‘betting transactions and communications’ with the result that they must be complied with. Relatedly, the applicant submitted that there was no room for ‘substantial’ compliance due to the use of this mandatory language, referring to Hunter Resources Ltd v Melville.[43] As a result, full compliance is required — in this case a signed r 4 authority must be completed, signed and lodged with Racing Victoria and the client list must be kept up to date.
[43](1988) 164 CLR 234, 248–9 (Dawson J); [1988] HCA 5.
Referring to the judge’s comment at [54] of the Reasons that the Ministerial approval has a penal element,[44] the applicant submitted that the judge’s construction of ‘unauthorised gambling’ for the purpose of s 2.4.1 was based upon his view (expressed at [42] and [43] of the Reasons)[45] that the legislature could not have intended that the r 4 breaches would constitute serious criminal offending.[46] The applicant submitted that the fact that the respondent may have committed offences under s 2.2.1 was not relevant to the issues for determination in this case,[47] and in any event, no such finding was made.
The respondent’s contentions
[44]See at [50] above.
[45]See at [45] and [46] above.
[46]Punishable by $165,220 fines and/or 2 years’ imprisonment.
[47]Relying upon Advisory Services Pty Ltd v Augustin [2018] VSCA 95, [49] (Santamaria, McLeish, Niall JJA).
The respondent submitted that the proposed ground of appeal (read together with the proposed sub-grounds) has no real prospect of success. Rather, the judge was right to conclude that the legislature did not intend that telephone bets made in the absence of a signed r 4 authority should constitute ‘unauthorised gambling’ under the Gambling Act, with the result that the relevant telephone bets were void.
This is because, while the respondent admitted the r 4 breaches, any such breach did not constitute a breach of condition (iv) of the Ministerial approval. As a result, notwithstanding the r 4 breaches, the relevant telephone bets:
(a)were placed using a ‘method of communication approved by the Minster’ under s 4A of the Racing Act (as required by s 4(4)(b) of that Act), namely the dedicated PABX system mandated by para 2 of the Ministerial approval;
(b)did not fall within the definition of ‘unauthorised gambling’ as those bets were ‘authorised by or under… another Act’, being the Racing Act; and
(c)were enforceable.
The respondent submitted that there were many reasons for concluding that a breach of r 4 of the Telephone Betting Rules is not a breach of condition (iv) of the Ministerial approval.
First, unlike many of the other Telephone Betting Rules, rr 4.1 and 4.2 do not deal with the subject of the Ministerial approval, being ‘all betting transactions and communications’. The respondent submitted that:
(a)the words ‘betting transaction’ is the placing and accepting of a bet and the word ‘communications’ refers to the immediate communications relating to that bet; and
(b)as a result, in performing the task of statutory construction, the Court should not widen condition (iv) to capture matters that are not ‘betting transactions or communications’.
The respondent submitted that, in this case, the completion and lodgement of a signed r 4 authority is neither a ‘betting transaction’ nor a ‘communication’ between the client and the bookmaker. As a result, the respondent submitted that the relevant telephone bets were placed pursuant to a method of communication approved by the Minister under the Racing Act because r 4 is separate and preliminary to the actual betting transaction and communication.
The respondent submitted that rr 4.1 and 4.2 may be contrasted with:
(a) rules 6.1 to 6.5.3 which provide for the conduct of betting transactions over an approved Telephone Betting System;
(b) rule 7.1 which requires a registered bookmaker to record all bets using an approved Telephone Betting System; and
(c) rules 3.1, 5.1 and 5.2 which are relevant to the conduct of communications.
In particular, the respondent referred to r 5 and submitted it has a direct relationship with the other conditions in para 2 of the Ministerial approval, namely conditions (i), (ii) and (iii) which directly relate to rr 5.1, 5.3 and 5.4 respectively.
Second, the respondent submitted that s 4(4)(b) and s 4A of the Racing Act, the Ministerial approval, and the Telephone Betting Rules are principally concerned with the use of approved methods of communication for remote betting transactions with the result that there is no basis for construing the words of condition (iv) so that any breach of the Telephone Betting Rules would give rise to a failure to comply with that condition. That is to say, there is nothing in the language, the subject matter or the objects of the statute or the Ministerial approval to suggest that any breach of the Telephone Betting Rules would have the effect of invalidating bets placed by that person. Further, the respondent submitted that the consequences for both parties of holding void every bet placed in the absence of a signed r 4 authority (including winning bets) also tells against such a purpose being discerned.
Third, the respondent contended that, in giving approval to the second of the two approved methods set out in the Ministerial approval, the Minister did not, by the terms of that approval, create any precondition in relation to the filing of a signed r 4 authority from the client in order to conduct telephone betting. Nor did condition (iv) provide any consequence for non-compliance. The respondent submitted that it was not a purpose of the legislative scheme for bets placed in breach of r 4 to become unauthorised, relying upon Project Blue Sky.[48]
[48]Project Blue Sky (1998) 194 CLR 355, 388–9 [91] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28.
Fourth, the respondent referred to two kinds of absurd consequences that would arise should the applicant’s construction be correct and submitted that Parliament could never be taken to have intended such consequences. The first related to the requirements of r 4.1 concerning the bookmaker’s obligation to keep an up-to-date client list with Racing Victoria: the respondent submitted that if the applicant’s construction is correct, any non-compliance in relation to any client would then render all bets with all clients void. The second related to the consequence for the applicant if the relevant telephone bets had resulted in a win. Counsel for the respondent submitted that if the applicant’s construction was accepted, absurd outcomes would result. Counsel suggested that if the roles were reversed (i.e. the applicant was seeking to collect his winnings and the respondent was claiming the transaction was void) then Parliament cannot be taken to have intended that the applicant would not be able to collect his winnings due to the respondent’s non-compliance with the Rules.
Counsel for the respondent asserted that the original purpose of this regime insofar as it renders betting transactions ‘void’ was to protect the levy tax for the purpose of the industry in circumstances where ‘SP bookmaking’[49] took place in pubs. This meant that ‘the punters who won off SPs could not enforce, and SPs could not enforce against the punters’. Given that counsel did not provide any basis for this submission we do not intend to address it further.
[49]Starting price bookmaking.
Finally, in all these circumstances, the respondent submitted that the judge:
(a) was right to conclude that the legislature did not intend for telephone bets made in the absence of a signed r 4 authority to constitute ‘unauthorised gambling’ under the Gambling Act (with the result that the bet is void). The respondent submitted that the proper question to ask in statutory interpretation is always, as Edelman J said in R v A2: ‘Does the intended meaning of the words used by Parliament extend to these circumstances?’[50] As a result, even if a r 4 breach does constitute a failure to comply with condition (iv) of the Ministerial approval (which is denied), it does not have the result that the method of communication used was not approved under s 4A of the Racing Act and the bets were not made under the authorisation contained in s 4;
(b)did not err in finding that there had been substantial compliance with the Telephone Betting Rules generally, as that was undoubtedly the case having regard to the matters set out in paras [49] to [51] of the Reasons and submitted, in relation to r 4.2, that it is absurd to suggest the applicant was not ‘giving himself authority to have the bet when he rang up’;
(c) did not fail to consider the meaning of the word ‘must’ in the Ministerial approval and rr 4.1 and 4.2 of the Telephone Betting Rules but rather had regard to the whole of the applicant’s pleadings and submissions;[51] and
(d) did not find that ‘breaches of the Telephone Betting Rules attract criminal penalties which are out of all proportion to the breach’ (as the applicant contends). Rather the judge quite properly identified that this was the consequence of the applicant’s construction noting that it was the applicant who pleaded a breach of s 2.2.1 of the Gambling Act against the respondent, and accordingly, it was proper for the judge to have regard to this consequence of the applicant’s construction.
[50](2019) 269 CLR 507, 560 [165]; [2019] HCA 35.
[51]Referring to [17], [20], [21] and [22] of the Reasons.

Analysis

It is first necessary to deal with the respondent’s submission that there was in fact no breach of condition (iv) of the Ministerial approval, notwithstanding the admitted r 4 breaches. In our view, r 4.2 is directly related to ‘all betting transactions and communications’, which is the language used in condition (iv) of the Ministerial approval. Rule 4.2(a) stipulates that the bookmaker must obtain the signed r 4 authority ‘prior to a Bookmaker conducting any betting transactions with a client using a Telephone Betting System’. Further, r 4.2(b) stipulates that the bookmaker ‘must not accept bets using the Telephone Betting System unless’ the signed r 4 authority has been completed by the client and provided to Racing Victoria (except where otherwise authorised by Racing Victoria). This prohibition directly relates to the placing of a bet, i.e. a ‘transaction’, because it prevents a bet from being accepted unless those conditions are satisfied. Further, it also relates to ‘communications’ because r 4.2 prohibits the bookmaker conducting or accepting bets using the ‘Telephone Betting System’, unless those conditions are satisfied. It follows that we reject the respondent’s submission that r 4.2 is not related to ‘all betting transactions and communications’ as required by the Ministerial approval: it is a requirement directly related to betting transactions and communications.
The primary question for this Court is then to determine whether it was a purpose of the legislative regime (in this case, the Gambling Act together with the broader statutory regime including the Racing Act, the Ministerial approval and the Telephone Betting Rules) that a bet placed in breach of r 4.1 and/or r 4.2 of the Telephone Betting Rules — and thereby condition (iv) of the Ministerial approval — should render that gambling unauthorised, with the result that the underlying wagering agreement relating to that bet is void and unenforceable. To answer this question, this Court must consider the language of the relevant provisions in question, together with the scope and objects of the whole legislative regime.[52] Consistent with R v A2,[53] we will therefore consider the ordinary meaning of the words used, as well as the ordinary principles of statutory construction.
[52]Consistent with Project Blue Sky (1998) 194 CLR 355, 390–391 [93] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28.
[53](2019) 269 CLR 507, 525–526 [52] (Kiefel CJ and Keane J); [2019] HCA 35.
In summary, we consider that the judge erred in concluding that the relevant telephone bets were not ‘unauthorised gambling’. This is because having regard to the text, scope and objects of the relevant statutes and legislative instruments, we have concluded that it was a purpose of the statutory framework that gambling activity (in the form of telephone bets) undertaken in circumstances where there has been a total failure to comply with r 4.2, would result in that gambling activity not being authorised under ss 4 and 4A of the Racing Act (due to non-compliance with the Ministerial approval). As a result, telephone bets placed in that manner are not authorised under the Racing Act (or another Act) and are therefore prohibited ‘unauthorised gambling’ under the Gambling Act. As a consequence, any wagering agreement relating to such unauthorised gambling is void and unenforceable.
It is appropriate to set out the reasons for reaching this conclusion in the context of how these interrelated statutes and legislative instruments operate. We have set out the relevant provisions of these statutes and legislative instruments earlier in these reasons. As a result, the following analysis sets out the conclusions we have drawn based upon them.
The starting point is that under the Gambling Act, gambling is prohibited unless it is authorised.[54] That authorisation may derive from the Gambling Act or another Act, but that authorisation is an indispensable requirement for legal gambling in Victoria. We refer to the analysis of the Gambling Act in paragraphs [6] to [13] above. Most relevantly, we refer to:
(a)the objects of the Gambling Act referred to in [7] above;
(b)the purposes of ch 2 referred to in [8] above, which includes to prohibit unauthorised gambling and to authorise certain types of gambling;
(c)the definition of ‘unauthorised gambling’, being ‘gambling that is not authorised by or under this Act or another Act’;
(d)div 1 of pt 2 of ch 2, including s 2.2.1(1), which provides that a person must not conduct unauthorised gambling; and
(e)div 2 of pt 2 of ch 2, referred to in [10] above, which authorises several kinds of gambling activities.
[54]Gambling Act, s 1.3(1) (definition of ‘unauthorised gambling’).
Chapter 2 of the Gambling Act sets out consequences for those who have conducted and participated in unauthorised gambling, namely:
(a)a person who conducts unauthorised gambling is liable for a penalty: s 2.2.1(1);
(b)the participant who has paid or staked money or other valuable consideration may recover that amount from each person who conducted the unauthorised gambling on a joint and several basis: s 2.2.2;
(c)otherwise, a wagering agreement relating to any unauthorised gambling is void: s 2.4.1; and
(d)there is no provision which allows for recovery of any other amount, such as any winnings.
The Racing Act, by s 4(1), is ‘another Act’ which authorises particular kinds of gambling. Relevantly, if gambling is conducted in accordance with ss 4(2)–(4) of the Racing Act, it will be authorised gambling under the Gambling Act.[55] The effect of s 4(4)(b) of the Racing Act is to authorise off-course (or remote) gambling on any horse race, harness race or greyhound race ‘using a method of communication approved by the Minister under section 4A [of the Racing Act]’. Failure to satisfy that requirement means that the relevant gambling activity does not fall within the authorisation of s 4(1) of the Racing Act, rendering it unauthorised gambling under the Gambling Act.
[55]See [16] above.
Under s 4A of the Racing Act, the Minister is able to ‘approve a method of communication which may be used by registered bookmakers or approved substitutes to accept bets from persons’ (s 4A(1)) ‘on any conditions the Minister thinks fit’ (s 4A(2)).
The Ministerial approval, issued pursuant to s 4A of the Racing Act approved two kinds of methods of communication for off-course or remote betting. The second method is communications by telephone utilising the dedicated PABX system. Consistent with s 4A(2) of the Racing Act, the second method is subject to several conditions, which are listed in para 2 of the Ministerial approval. Relevantly, condition (iv) is that ‘all betting transactions and communications must be conducted in accordance with [the Telephone Betting Rules]’.
It is then necessary to consider rr 4.1 and 4. 2 of Telephone Betting Rules (which are set out at [27] above). In summary:
(a)rule 4.2(a) relevantly provides that ‘prior to a Bookmaker conducting any betting transactions with a client using a Telephone Betting System, the Bookmaker must obtain a written authority from the client authorising the Bookmaker to accept bets from the client or the client’s authorised agent’. The authority ‘must disclose the full name, address and date of birth of the client and any person that is authorised by the client to conduct betting transactions for and on behalf of the client’;
(b)rule 4.2(b) relevantly provides that ‘a Bookmaker must not accept bets using the Telephone Betting System from any person unless’ the client has signed and completed the signed r 4 authority and unless the ‘Bookmaker has first lodged a true and complete copy’ of that authority with Racing Victoria; and
(c)rule 4.1 relevantly provides that ‘every Bookmaker must lodge’ with Racing Victoria in the form prescribed by Racing Victoria the ‘names, addresses and dates of birth of all clients and their authorised agents from whom the Bookmaker accepts bets using a Telephone Betting System’, and promptly advise Racing Victoria ‘of all new clients so that the list is always current and up-to-date’.

Although proposed ground 1 refers to both rr 4.1 and 4.2, the applicant’s real focus was the judge’s consideration of r 4.2. As a result, we shall first address r 4.2. For the reasons which follow, we have concluded that, based on the Gambling Act and the related legislative scheme, a bet placed in circumstances where there has been a failure to comply with the requirements of r 4.2 is ‘unauthorised gambling’ under the Gambling Act, with the result that the underlying wagering agreement relating to that bet is void and unenforceable. In this context, we are also dealing with a total failure given that there was no suggestion that the respondent had obtained anything resembling a written, signed authority from the applicant.
First, r 4.2(b) clearly stipulates that bookmakers ‘must not accept bets using the Telephone Betting System unless’ a signed r 4 authority is completed by the client and a copy is lodged with Racing Victoria. In our view, the emphatic language of r 4.2 evinces an intention to require sub-r 4.2(a) and (b)(i)–(ii) to be satisfied before the prohibition on accepting bets in the primary clause of r 4.2(b) is lifted. This is in a context where condition (iv) of the Ministerial approval requires that betting transactions and communications ‘must’ be conducted in accordance with the Rules. Put succinctly, telephone betting between a client and a bookmaker is not conducted in accordance with the Ministerial approval without a signed written authority from that client having been lodged with Racing Victoria.
Second, when considering the significance of r 4.2(a) it is important to recall that telephone betting has a different character to in-person betting. Before conducting an in-person transaction, the bookmaker has the ability to observe and deal with the client directly, enabling them to confirm several important details including that the client is over 18 and is voluntarily placing bets. By contrast, over the telephone, it may be more difficult or near impossible for the bookmaker to assess these factors in relation to a client, particularly a new client with whom they have never interacted. In our view, this distinction further explains why the Telephone Betting Rules require the signed r 4 authority to be completed and provided to the bookmaker (and Racing Victoria) prior to any bets being placed. This is all the more important given that the rule also contemplates telephone betting being made for a client by an agent.
Third, the general prohibition against gambling absent positive authorisation evinces a strong legislative intention that the high risk activity of gambling will only be permitted in tightly contained circumstances. The objects of the Gambling Act, which forms part of the relevant legislative context within which the Telephone Betting Rules fall to be construed, also evince a consistent theme of protection. Those objects include the promotion of responsible gambling to ‘minimise harm’ caused by problem gambling; to ensure minors are not allowed to gamble; and to ensure permitted forms of gambling are conducted ‘honestly’ and ‘free from criminal influence and exploitation’.[56] The requirements of r 4.2 have the capacity to further each of these objects. By requiring the signed r 4 authority to disclose the full name, address and date of birth of the client (and any person the client authorises to conduct betting transactions on their behalf), r 4.2(a) enables a bookmaker to confirm both that their client is over the age of 18 and that the client is in fact who they purport to be. The requirement for execution in r 4.2(b) is important to ensure that personal details are properly authenticated and reduces the possibility of identity theft. The lodgement by the bookmaker also ensures further control and protection by Racing Victoria.
[56]Gambling Act, ss 1.1(2)(a), (ab), and (d). See [7] above.
We are conscious that there may also be other consequences of a failure to comply with r 4.2. Thus, r 8 of the Telephone Betting Rules (headed ‘Exclusion from a Telephone Betting System’) provides, in substance, that the bookmaker agrees that upon any breach of those Rules, Racing Victoria may prohibit the bookmaker from using a Telephone Betting System. However, we do not consider such other consequences to be either determinative or exhaustive of the consequences of non-compliance with r 4.2 of the Telephone Betting Rules, for reasons already provided (particularly at [86] to [88] above).
Overall, having regard to the language, scope, objects and context of the relevant statutory provisions (i.e. the Gambling Act together with the broader statutory regime including the Racing Act, the Ministerial approval and the Telephone Betting Rules) a bet placed in circumstances where there has been a total failure to comply with r 4.2 of the Telephone Betting Rules renders that gambling ‘unauthorised’, with the result that the underlying wagering agreement relating to that bet is void and unenforceable.
Applying this analysis to the present case, the respondent’s admitted failure to comply with r 4.2 of the Telephone Betting Rules in relation to the relevant telephone bets means that ‘all betting transactions and communications’ using the dedicated PABX system have not been conducted in accordance with the Telephone Betting Rules. In these circumstances, a condition of the Ministerial approval (i.e. condition (iv)) made pursuant to s 4A(2) of the Racing Act has also not been complied with. The relevant telephone bets were not authorised under s 4(4)(b) of the Racing Act and therefore did not fall within a statutory carve-out from the prohibition on unauthorised gambling in s 2.2.1 of the Gambling Act. Accordingly, the wagering agreement underlying the relevant telephone bets is void under s 2.4.1 and the applicant is entitled to recover any money or valuable consideration staked on those bets.
It remains to deal with a number of other matters raised by the respondent.
First, we consider that there is no scope, in law or fact to argue, as the respondent did, that there has been substantial compliance with r 4.2. First, as noted above, the High Court in Project Blue Sky made clear that a court must ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.[57] For the reasons set out above, we have concluded that the answer to this question is ‘yes’ in relation to r 4.2(a) and (b).
[57]Project Blue Sky (1998) CLR 355, 390–391 [93] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28.
Second, and in any event, r 4.2(a) requires written authorisation from the client that the bookmaker may accept bets from the client or the client’s authorised agent. Although it may be accepted that the respondent provided some of the applicant’s information (as required by r 4.1) to Racing Victoria (as set out at [39] and [40] above) as we have already identified, there was no suggestion that the respondent had obtained anything resembling a written, signed authority from the applicant. The judge’s finding that there was substantial compliance by the respondent with the Telephone Betting Rules,[58] overlooks this critical aspect of r 4 and the judge erred in doing so. Rule 4.2 is a significant requirement of the Telephone Betting Rules in relation to betting transactions and communications.
[58]Reasons, [51].
Next, it is evident from our analysis above that we do not accept counsel for the respondent’s submission that it is absurd to suggest the applicant was not ‘giving himself authority to have the bet when he rang up’. The thrust of that submission was that the need for an authority is, in effect, redundant given that the applicant was ‘authorising himself’ to make the relevant telephone bets each time they were placed over the phone with the respondent. This submission is plainly contrary to the express language in the Telephone Betting Rules and disregards the important distinction between in-person and telephone bets. There is nothing absurd about requiring an authority in writing. The so-called absurdity is even less evident in the case of a person purporting to place a bet as the agent of a client.
Finally, the respondent submitted that it would be an absurd outcome if participants who, by no fault of their own, engaged in unauthorised gambling and were not entitled to collect the winnings of that unauthorised gambling. We reject this submission in light of the provisions of the Gambling Act set out above at [11] to [13] which address the consequences that flow from ‘unauthorised gambling’ namely:
(a)section 2.4.1 which deems wagering agreements void if they relate to unauthorised gambling; and
(b)section 2.2.2 which enables the participant who has paid or staked money or other valuable consideration to recover that amount from each person who conducted the unauthorised gambling on a joint and several basis.
It has been said that void contracts are ‘devoid of legal consequences’[59] i.e. ineffective to create any enforceable legal obligations. In Defina v Kelly,[60] Rich J (who dissented as to the outcome) described the effect of nullifying provisions of wagering agreements as follows:
Formerly at common law wagers were not illegal and actions were brought and maintained to recover money won upon them. But in 1845, by s. 18 of 8 & 9 Vict. c. 109 Imp, betting contracts were made null and void and money won under them was not recoverable. The legality of wagering contracts was not affected, but the law was no longer available for their enforcement and the parties to them were left to pay wagers or not as their sense of honour might dictate...[61]
[59]Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432, 459 (Windeyer J); [1969] HCA 4.
[60](1946) 72 CLR 164; [1946] HCA 20.
[61]Ibid 171 (emphasis added).
Understood in this context, in our view, not only is there no absurd outcome if participants could not collect the winnings of unauthorised gambling, it would be an odd outcome if participants were entitled to the benefit of winnings attributable to a contract deemed void by statute as a result of gambling activity having been conducted contrary to law.
Finally, both the judge and the respondent placed emphasis on the fact that s 2.2.1(1) of the Gambling Act rendered any person who conducts unauthorised gambling liable to a criminal penalty, and that this consequence was significant in determining whether telephone bets placed in breach of r 4.2 were ultimately enforceable. However, the imposition of the penalty also underscores the policy of protection and the strength of the Parliamentary disapproval of unauthorised gambling. For the reasons set out above, and notwithstanding these penal consequences, we have reached the view that a bet placed in breach of r 4.2 of the Telephone Betting Rules of the kind considered in this case is clearly intended to be classified as ‘unauthorised gambling’ and rendered the underlying gambling agreement void and unenforceable under s 2.4.1 of the Gambling Act.
As a result of our conclusion, it is unnecessary for this Court to consider whether a breach of any of the remaining Telephone Betting Rules (including r 4.1) or the Club Licence Rules would also result in the relevant gambling being unauthorised.
Accordingly, we would grant leave to appeal and allow the appeal.
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[2024] VSCA 160

10 July 2024