SkyCity Adelaide Pty Ltd v Treasurer of South Australia

The High Court of Australia heard an appeal from SkyCity Adelaide Pty Ltd (the appellant) against the Treasurer of South Australia (the respondent). The dispute concerned the interpretation of the Casino Duty Agreement (CDA) and the application of the Casino Act 1997 (SA) regarding the calculation of casino duty payable by the appellant, which operated electronic gaming machines and automated table games. Specifically, the appellant operated a "Rewards Program" where members could convert loyalty points into electronic gaming credits, which could then be redeemed for cash or used to bet. The core of the disagreement lay in whether the use of these converted credits to place a bet constituted an "amount received" by the appellant "for or in respect of consideration for gambling" for the purposes of calculating "gross gambling revenue" under the CDA. A secondary issue involved whether the 20% per annum interest payable for late payment of casino duty, as stipulated in the CDA, could be subject to relief against penalties at common law or in equity.

The High Court was required to determine two principal legal issues. Firstly, it had to decide whether the converted credits used by a member to place a bet on an electronic gaming machine or automated table game constituted "gross gambling revenue" as defined in the CDA, meaning an "amount received" by the appellant "for or in respect of consideration for gambling". Secondly, the Court had to consider whether the obligation to pay 20% per annum interest for late payment of casino duty, as provided for in the CDA, could be characterised as a penalty at common law or in equity, thereby potentially allowing for relief against its enforcement.

The High Court reasoned that the "amount received" by the appellant for consideration for gambling was the value of the converted credits at the time they were used to place a bet. The Court held that the appellant received consideration for the gambling activity when the member used the converted credits, as these credits represented a form of payment or value exchanged for the opportunity to gamble. Consequently, the Court concluded that the use of converted credits did constitute "gross gambling revenue" under the CDA. Regarding the interest on late payment, the Court found that the 20% per annum interest was not a penalty at common law or in equity, but rather a genuine pre-estimate of loss or a commercial rate of interest, and therefore relief against its enforcement was not available.

The High Court dismissed the appeal with costs. However, it granted special leave to cross-appeal and allowed the cross-appeal with costs. The judgment of the Court of Appeal of the Supreme Court of South Australia was varied by deleting the answer "Yes" to Question 3 of the questions of law referred for its consideration and substituting the answer "No". Furthermore, the order for costs was replaced with an order that the appellant pay the respondent's costs.