Landmark Case Against Poker Machines to be Launched – Gambling with the law?
Last year, it was reported that law firm Maurice Blackburn were exploring whether poker machines breach the Australian Consumer Law. Earlier this month, the firm announced that they were preparing to commence their case against Crown Casino and Aristocrat (poker machine manufacturer) for Ms Guy, a woman who played poker machines for 14 years. The firm are not seeking compensation, but rather a declaration that a poker machine game called Dolphin Treasure is deceptive. They will not pursue a ban on poker machines, but rather the introduction of clear warnings.
Are poker machines misleading and deceptive?
The firm’s key argument is that the poker machine operators are engaging in misleading and deceptive conduct. This is prohibited under section 18 of the Australian Consumer Law, which states that:
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
For this case to be successful, Maurice Blackburn will need to prove that conduct misleads or deceives a class of consumers. For example, a class of consumers could be ‘gamblers’ or ‘novice gamblers.’ The firm have already identified some of the conduct which they consider to be misleading and deceptive, including ‘losses described as wins.’ Jacob Varghese, principal of the social justice practice, stated:
We think there’s a genuine argument that some of the behaviour by the pokie designers is misleading and deceptive in that it makes people think things are happening that are not actually happening.
One of those things is losses described as wins, in which the machine will act as if you’ve won but really you’ve net-lost. You might have won 30 cents on the dollar you played.
You’ve still lost 70 cents but you still get all the stimulus from the machine as if you’ve won.
It is expected that the firm will draw on recent Canadian research which found that the flashing symbols and music which compliment ‘losses disguised as wins’ activate similar arousal levels in notice gamblers as real wins.
The prohibition outlined in section 18 of the Australian Consumer Law has been applied to a wide range of conduct. Last year the Federal Court declared that the company behind Nurofen engaged in misleading and deceptive conduct for marketing the same medication as four different products specifically targeted to target migraine pain, tension headache, period pain and back pain. Earlier that year, the Federal Court found the headline ‘$200 FREE BETS FOR NEW CUSTOMERS’ to be misleading and deceptive as it was not appropriately qualified with the terms and conditions. Other recent claims have involved Coles frozen par-baked bread being described as ‘fresh,’ and misleading descriptions of pricing for TPG internet packages. Some cases have even considered use of colour and layout in a store.
Will the case succeed?
At this stage it is difficult to predict whether the court will consider poker machines operators to be engaging in misleading and deceptive conduct. It will be interesting to see how the case develops. The brevity of the prohibition outlined in section 18 of the Australian Consumer Law understates the complexity of this area of the law. The large volume of case law shows how the prohibition can apply to a wide variety of marketing strategies, products, and services. If you are unsure whether any aspect of your marketing or operations involves misleading and deceptive conduct, you should seek advice from experienced commercial lawyers.
Our expert commercial lawyers are experienced in providing advice on the applicability of the provisions. Please call our Newcastle and Sydney lawyers on (02) 4929 7002 or fill out an enquiry form on our website.
‘Poker machines’ by Dennis Yang available at Flickr under a Creative Commons Attribution 2.0.