Aristocrat lawsuit could change Australian gambling forever

WHILE Australian casinos count their losses in the fallout of China’s raids on Crown properties in the region, it is a case much closer to home that could have the most significant impact on the way gambling is governed in this country.

If Shonica Guy’s lawsuit against Aristocrat Technologies and Crown Resorts is successful, it is likely to have enormous and far-reaching consequences for the Australian gaming industry as a whole.

Ms. Guy, a pokies players since age 17, is suing for “significant losses” on the grounds that an Aristocrat poker machine at Crown Melbourne used deceptive features and false advertising to mislead her into thinking she had a genuine chance of coming out a winner.

The case, which is the first of its kind, has become a rallying point for gambling reformists and anti-pokies campaigners who want wholesale changes to Australia’s gaming laws.

“If successful, the litigation will have ramifications for the design of all poker machines in the industry,” said Maurice Blackburn, the law firm representing Ms. Guy.

Aristocrat is one of Australia’s most successful tech enterprises, ranking second only to International Gaming Technology (IGT) in the manufacturing and distribution of slot machines.

The company has firmly denied that its games are crooked, saying in a statement: “Aristocrat emphatically rejects any suggestion that its games are designed to encourage problem gambling, or in any way fail to comply with all relevant regulations and laws.”

According to official national statistics, Australians lose over $17.6 billion every year on pokies machines.

More than $5 billion of that occurs within casinos, while the rest goes to the thousands of clubs and hotels nationwide that are licensed to operate gaming machines.

It is because of numbers like these that many industry experts believe Crown and other Australian casino firms will endure no significant long-term hardship as a result of recent events in China.

Eighteen Crown employees and a number of other key figures involved in the company’s international VIP trade were arrested in October as part of the Chinese government’s ongoing crusade against corruption and other gambling-related crimes.

Crown’s share price dived nearly 17 per cent as a result before levelling out, but the firm has moved to downplay the significance and scale of Chinese VIP gambling in its overall operations.

“Less than half of the revenue from Crown’s international VIP gaming programs is currently generated by visitors from mainland China,” the company said in a statement.

“Consequently, this segment of the business represents approximately 12% of the Crown Group revenues in FY16.”

Rival casino trader Star Entertainment has made similar statements in a bid to divert attention from CEO Matt Bekier’s decision to cancel a business trip to Macau recently.

But the biggest noises are coming from the Alliance for Gambling Reform, which is demanding drastic government action to combat what it sees as a national addiction.

Senator Nick Xenophon and MP Andrew Wilkie are among the loudest voices in a choir that is calling for tighter regulation on all forms of gambling in Australia.

That includes not only land-based casinos and licensed pokies venues, but also bookmakers, online betting operators, and offshore sites that offer interactive casino games to Australian citizens.

Australia is home to around 20 per cent of the world’s pokie machines and rank number one for per capita spending on all forms of real money gambling.

“Australia leads the world in gambling expenditure, with per capita expenditure of A$1,241 overall and over A$1,500 in the most populous and poker machine-dense state of New South Wales,” said public health advocate Charles Livingstone, citing figures from a 2015 report.

“This is twice the figure for the U.S., and substantially ahead of second-placed Singapore, which relies for much, if not most, of its revenue on tourists.”

Our say on the lawsuit

Whichever way you look at it, the anti-gambling brigade is gaining momentum.

Whether it can attract any substantial support where it matters is another issue.

Xenophon wields plenty of influence in the Senate from his throne on the crossbench, but major reforms remain unlikely, as things stand, without full backing from one of the major parties.

That will almost certainly change if Ms. Guy wins her case against Aristocrat and Crown.

Besides having a massive effect on the production, promotion and regulation of pokies machines all over Australia, such a landmark ruling would also change the face of our booming sports betting industry.

Xenophon and company are already seeking to introduce legislature that will prevent online bookies from advertising odds and promotions during live sports broadcasts.

If Aristocrat and Crown somehow fluff their defence, what other staples of Australian betting and gaming will come to be viewed as ‘deceptive’, ‘misleading’, or ‘fraudulent’?

Will bookies still be allowed to offer sign-up bonuses (which are already banned in several states)? How about cash-back specials, bonus bets and boosted odds? Will new innovations such as early cashouts go by the wayside as well?

The big thing standing in the way of wholesale reform right now is government gaming revenue, of which the states and territories racked up a little under $6 billion for the financial year ending June 2015.

Any ruling that essentially dubs those gains as ill-gotten could unleash all kinds of mayhem, so let’s hope it doesn’t come to that.