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26 • Touchline • Issue 16
LAYING THE CARDS
ON THE TABLE
In summary, the decision in Kakavas
is unlikely to provide a jackpot for
disgruntled gamblers. The critical lesson
for operators is that, in addition to any
procedures specified by relevant gaming
regulation they must ensure they adopt
procedures to identify patrons who
may lack the capacity to control their
gambling and, if they are on notice
of a potentially vulnerable patron, to
implement (and document) procedures
that will allow them to demonstrate
that they did not take advantage of that
potential vulnerability.
The High Court noted that given Mr
Kakavas was a high roller, it would have
made it difficult for the casino to identify
whether he was a pathological gambler
or not as it was always a possibility that a
high roller may incur substantial losses.
The Court further noted that Mr Kakavas
went to considerable lengths to assure
Crown that his troubles with gambling
were behind him and “he presented as
a successful businessman able to afford
to indulge himself in the high stakes of
gambling in which he chose to engage.”
Mr Kakavas’ position was distinguished
from that of a pensioner being invited
to cash her pension at the casino and
gamble with the proceeds. Likewise, a
vulnerable gambler may also be a person
who is “evidently intoxicated, adolescent,
senescent or simply incompetent.”
Having regard to the above, the court
concluded that it was not sufficiently
evident to the casino that Mr Kakavas
was so affected by a psychological
impairment that he was unable to make
worthwhile decisions in his own interests
whilst gambling.
Whilst there is no general duty of care
owed by a casino to protect gamblers
from the financial consequences of their
wagering, the case raises the possibility
that future claimants may allege that
gaming operators unconscionably took
advantage of some vulnerability which
prevented them from controlling their
gambling.
Whilst this case is unique as it deals with
a high roller, it highlights the possibility
that there may be circumstances in which
a club with gaming machines should
intervene to protect vulnerable gamblers
from themselves. The case identified
a number of potentially vulnerable
gamblers such as pensioners, intoxicated
persons and youths. However, exposure to
liability would depend upon the gambler
demonstrating the operator knowingly
and unconscionably took advantage of
some vulnerability on their part.
So, when will a gambler be successful
in establishing that a gaming operator
has acted unconscionably and that
they should be entitled to the court’s
intervention to return their losses? In
Kakavas, the High Court provided some
guidance by stating that a successful
application for equitable relief would
require proof of a predatory state of
mind as distinguished from inadvertence
or indifference. Unfortunately, the Court
offered little insight into what this
involved beyond its finding that the
special perks offered by the casino to Mr
Kakavas did not meet the threshold in
the circumstances.
What should clubs do to protect
themselves? In view of the fact that many
sports clubs may encounter gamblers
who fall within the groups of people
that the court noted were potentially
vulnerable, it is suggested that clubs
should be particularly vigilant and
observant of gamblers during special
promotions designed to entice people to
spend money on gaming at the club. Care
should be taken to identify gamblers
who attend the club to gamble on a
frequent basis or have evidently lost a
considerable amount of money.
Operators must also consider what
should be done to allow them to resist
an allegation that they have taken
advantage of a potentially vulnerable
gambler. The steps that are required will
very much depend on the circumstances.
The difficulty in identifying a vulnerable
gambler can be contrasted with that of
problem drinkers, who are more readily
identified. An intoxicated person can
simply be asked to leave the premises
for the evening and responsible service
of alcohol can prevent intoxication. In
contrast to the usually obvious signs of
intoxication, without detailed knowledge
of a patron’s circumstances, it is difficult
to assess whether a person lacks the
capacity to control their gambling. This
difficulty is heightened where the losses
are incurred through automated gaming
machines where there is little or no
scope to assess the gambler’s ability
to control their actions or sustain any
associated financial losses. The critical
factor is that clubs need to be able
to provide evidence that they have
taken the necessary steps to protect
vulnerable problem gamblers from
themselves. In this regard, clubs should
have documented policies in place to
identify and deal with these issues and
to record the fact that, when appropriate,
those procedures were followed.
Whilst not intended to be definitive,
once a potentially vulnerably gambler
has been identified, appropriate steps
may include ensuring an appropriately
qualified officer of the operator meets
the gambler to assess whether they
have the capacity to control their
gambling, making the patron aware of
relevant counseling services, raising
the possibility of ‘self-banning’ and, in
appropriate circumstances, excluding the
patron from use of the club’s gaming
facilities. A high level of discretion and
sensitivity is required in the application
of such procedures. Gambling is, after
all, an adult activity (with obvious risks
of financial loss) and this should be
remembered before a person’s general
liberty to spend their money as they see
fit is reduced.