Preece v Aristocrat Leisure Limited

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FEDERAL COURT OF AUSTRALIA

Preece v Aristocrat Leisure Limited [2025] FCA 742

File number(s): VID 1105 of 2023
Judgment of: ANDERSON J
Date of judgment: 8 July 2025
Catchwords: REPRESENTATIVE PROCEEDINGS – Application seeking orders for opt out and group member registration for the purposes of soft class closure orders – registration opposed by applicants – where registration not necessary to facilitate settlement – unreliability of information obtained through registration – material cost of registration regime – application for registration regime dismissed.
Legislation:

Interactive Gambling Act 2001 (Cth)

Federal Court of Australia Act 1976 (Cth)
Cases cited:

Alford v AMP Superannuation Ltd (No 2) [2024] FCA 423

J Wisbey & Associates Pty Ltd v UBS AG (No 2) [2024] FCA 147

Lendlease Corporation Ltd v Pallas (2025) 99 ALJR 834; [2025] HCA 19

Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (2017) 252 FCR 1; [2017] FCAFC 98

Parkin v Boral (2022) 291 FCR 116; [2022] FCAFC 47
Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 96
Date of hearing: 26 June 2025
Counsel for the Applicant: Mr WAD Edwards KC and Ms AM Folie
Solicitor for the Applicant: William Roberts Lawyers
Counsel for the Respondents: Mr P Wallis KC and Mr H Atkin
Solicitor for the Respondents: King & Wood Mallesons

ORDERS

VID 1105 of 2023
BETWEEN:

NICOLE PREECE

Applicant
AND:

ARISTOCRAT LEISURE LIMITED (ACN 002 818 368)

First Respondent

PRODUCT MADNESS, INC.

Second Respondent

BIG FISH GAMES, INC.
Third Respondent

ORDER MADE BY:

ANDERSON J

DATE OF ORDER:

8 JULY 2025

THE COURT ORDERS THAT:

1.The parties are to confer and submit proposed minutes of orders to give effect to the reasons for judgment.

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


REASONS FOR JUDGMENT

ANDERSON J:

1.                 Introduction

  1. The applicant, by interlocutory application dated 24 April 2025 (applicant’s IA), seeks orders for approval and distribution of opt out notices to group members, and orders for the respondents to provide the applicant information about group members’ purchases on the online game platform apps that are the subject of the claims to facilitate mediation.

  2. The respondents, by interlocutory application dated 19 May 2025 (respondents’ IA) seek orders for distribution of notices to group members for both opt out and registration which foreshadow the respondents’ intent, in the event of a future settlement, to seek orders that only those group members who have registered may benefit from any settlement (often referred to as “soft class closure” orders).

  3. The respondents’ IA also seeks orders that some of the information to be provided to the applicant for mediation is limited to information about group members who have registered pursuant to the respondents’ proposed regime. 

  4. The applicant, in support of the orders sought, relies on the affidavits of Bill Petrovski, dated 24 April 2025 (Petrovski 1) and 5 June 2025 (Petrovski…

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Details
Case
[2025] FCA 742
Decision Date

CaseChat Overview and Summary

In Preece v Aristocrat Leisure Limited, the applicant, Preece, sought to prevent the respondent, Aristocrat Leisure Limited, from proceeding with a registration regime and seeking soft class closure orders. The court had to determine whether it should make orders for registration and the approval of a notice to group members about the respondents' intent to seek soft class closure orders in the event of a future settlement. Preece opposed such orders on the basis that the respondents’ records were sufficient to allow the parties to effectively participate in a mediation, the information sought by the respondents as part of the registration process would be inutile as an aid to mediation, and the proposed registration regime would result in significant costs being incurred for no or immaterial benefit.

The court examined the nature of the proceeding, which was an open class action brought by Preece on her own behalf and on behalf of persons who played “Social Casino Games” and purchased “Virtual Currency” while playing those games between 22 December 2017 and 12 December 2024. The applicant alleged that the Social Casino Games were played for something “of value” as the Virtual Currency extended the privilege of playing the games without additional cost to the user. The court considered the substantive differences between the parties’ respective orders, particularly regarding registration and soft class closure. The applicant opposed the Vulnerable Harm questions on the basis that the information sought as part of the registration process was not going to assist at mediation and would result in significant costs being incurred for no material benefit.

The court dismissed the application for registration regime, finding that the information obtained through registration would not be reliable and that the costs of the registration regime would outweigh any benefit. The court found that the respondents’ records were sufficient to allow the parties to effectively participate in a mediation, and that the information sought by the respondents as part of the registration process would be inutile as an aid to mediation. The court also found that the proposed registration regime would result in significant costs being incurred for no or immaterial benefit.

The court ordered the parties to confer and submit proposed minutes of orders to give effect to the reasons for judgment.

Orders

Orders of the court

1. The parties are to confer and submit proposed minutes of orders to give effect to the reasons for judgment.

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

Background

Background to the litigation

The central dispute between the parties concerns whether the Court should make orders for registration and the approval of a notice to group members foreshadowing the respondents’ intent to seek soft class closure orders in the event of a future settlement. The applicant resists such orders on the basis that (i) the respondents’ records, particularly about the quantum of likely group members losses, are sufficient to allow the parties to effectively participate in a mediation; (ii) the information sought by the respondents as part of the registration process will be inutile as an aid to mediation; and (iii) the proposed registration regime is likely to result in significant costs being incurred for no or immaterial benefit. 2. Background The nature of the claims advanced in the proceeding were outlined at [8]-[18] of the applicant’s written submissions, dated 10 June 2025 (AS), which the respondents agreed were adequately summarised in their written submissions, dated 18 June 2025 (RS) at [4]. The applicant’s outline of the claims are reproduced below. The proceeding is an open class action. The applicant brings the claim on her own behalf, and on behalf of persons who, between 22 December 2017 and 12 December 2024 (Relevant Period) and while physically present in Australia, have played “Social Casino Games” and purchased “Virtual Currency” while playing those games. The Social Casino Games are poker machine style games offered on online game platform apps (Apps) which it is alleged the respondents developed. Many of the Social Casino Games are adapted from land-based gaming machines (colloquially known as “pokies”) distributed in Australia. Some are aesthetically almost indistinguishable from their pokies-equivalent, and have the same name (for example, “Queen of the Nile”). All of the Apps are accessible on mobile phones, computers and other electronic devices (such as tablets), and are available to be downloaded for free using an “app store” for the particular device (such as Apple App Store, Google Play Store and Amazon Appstore). Some of the Apps are accessible via links from the websites of the second and third respondents (Product Madness Inc. and Big Fish Inc.), and via Facebook. The focus of the applicant’s claim is the virtual chips, coins, currency which are available for purchase on the Apps (Virtual Currency). The applicant alleges that when playing the Social Casino Games, each turn of a game costs an amount of Virtual Currency. Users allocate or risk an amount of Virtual Currency to play each turn of the game, and for each turn, a user will either win or lose. A win results in additional Virtual Currency being allocated to the user’s profile on the App, while a loss results in the amount of Virtual Currency that was risked being deducted from the user’s profile. When a user has insufficient Virtual Currency remaining on their profile on the App, the user can continue to play the Social Casino Game by purchasing additional Virtual Currency within the App by the payment of real money. The applicant alleges, in summary, that the Social Casino Games are played for something “of value”, as the Virtual Currency which may be won by a user extends the privilege of playing the games without additional cost to the user. Users who have spent real money are, in a very real sense, chancing that money to win something which they would otherwise have to pay for.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The substantive differences between the parties’ respective orders may be summarised as follows. 3.1 Registration and soft class closure The applicant submits that the notices should only address group members’ right to opt out of the proceeding. By contrast, the respondents seek approval of a notice which also advises group members of an ability to register their claim in the proceeding, and also states that upon any settlement of the proceeding, the respondents may seek an order which, if made, would have the effect of providing that any group member who, by the registration deadline has not registered or opted out, will remain a group member but, subject to court order, not be permitted to seek any benefit pursuant to the settlement. The respondents’ proposed registration form also requires group members to provide information including responses to the following questions (derived from the language used in the applicant’s Statement of Claim), for which the options for responsive answers are “yes”, “no” or “unsure” and are stated to “help to determine if you are a group member who was vulnerable to harm, including financial harm, from using the Apps and spending real money on the Apps”:4. Do you satisfy all of the following criteria: (a)You played any of the Social Casino Games that are listed in any of Schedules A, B or C attached to this registration form between 22 December 2017 and 12 December 2024 (Relevant Period); and (b)You made purchases using real money and were physically present in Australia while playing the Social Casino Games during the Relevant Period. 5.Were you under 18 years of age at the time of the conduct referred to in paragraphs 4(a) and (b)? 6.Had you been clinically diagnosed as suffering from a gambling disorder in accordance with the diagnostic criteria in DSM-5: Gambling Disorder at the time of the conduct referred to in paragraphs 4(a) and (b)? 7.Did you satisfy the diagnostic criteria for a gambling disorder in accordance with the diagnostic criteria in DSM-5: Gambling Disorder but had not been clinically diagnosed at the time of the conduct referred to in paragraphs 4(a) and (b)? 8.Would you have attained a score of 3 to 7 (moderate risk gambler) or 8 and above (problem gambler) in accordance with the Problem Gambling Severity Index at the time of the conduct referred to in paragraphs 4(a) and (b) above? The respondents seek orders that they be provided with the personal contact details of all persons who register, in addition to the information provided by the group member in response to the Vulnerable Harm questions. The applicant opposes the Vulnerable Harm questions on the basis that the information sought as part of the registration process is not going to assist at mediation and will result in significant costs being incurred for no material benefit. The applicant submits that asking vulnerable people to answer a questionnaire concerning problem gambling is likely to produce completely unreliable information that will not assist a mediation. 3.2 Form of distribution