Skycity Adelaide Pty Ltd v Treasurer of South Australia & Anor

Skycity Adelaide Pty Ltd (the Applicant) sought a determination from the Supreme Court of South Australia regarding the calculation of casino duty payable under a Casino Development Agreement (CDA). The Treasurer of South Australia and the Commissioner of State Taxation (the Respondents) were the other parties. The dispute concerned whether certain electronic gaming credits, derived from loyalty points, should be included in the calculation of gross gambling revenue, and whether loyalty points themselves constituted monetary prizes for the purposes of net gambling revenue. A further question arose as to the applicability of penalty clause principles to the CDA if the Applicant was found liable for unpaid duty.

The court was required to determine three specific questions. Firstly, whether "Converted Credits," which are electronic gaming credits obtained by customers through the conversion of loyalty points, constitute an "amount received by the Licensee during the period for or in respect of consideration for gambling" as defined within the "gross gambling revenue" under the CDA. Secondly, whether loyalty points received by customers for gambling on electronic gaming machines and automated table games qualify as "monetary prizes" under the definition of "net gambling revenue" in the CDA. Thirdly, if the Applicant were found liable for unpaid casino duty based on the answers to the first two questions, whether common law or equitable principles concerning penalty clauses apply to clause 11 of the CDA.

The court answered the first question in the affirmative, finding that Converted Credits did constitute an amount received by the licensee for consideration for gambling, and therefore formed part of gross gambling revenue. The second question was answered in the negative, determining that loyalty points did not constitute monetary prizes for the purposes of net gambling revenue. The court also answered the third question in the affirmative, concluding that if the Applicant was liable for unpaid duty, then principles concerning penalty clauses would apply to clause 11 of the CDA.