ASSESSMENT OF THE PENALTY
73 Civil penalties are imposed primarily, if not solely, for the purpose of deterrence (Pattinson at [15]). Deterrence has two aspects, namely specific deterrence of the contravenor and, by example, general deterrence of other would-be contravenors (Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3 at [116] (per Keane, Nettle and Gordon JJ)).
74 The object of the imposition of civil penalties is to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the provision (CSR Ltd at 52,152).
75 Importantly, a civil penalty must be fixed with a view to ensuring that the penalty is not such as to be regarded by the offender or others as an acceptable cost of doing business (Singtel Optus at [62] - quoted with approval in Pattinson at [17]). The penalty must strike a reasonable balance between deterrence and oppressive severity (Pattinson at [41], [46]).
76 The maximum penalty which might be imposed by the Court is $3,288,375,000. I have concluded that, during the contravening period, Diverse Link received approximately $4,200,000 in deposits into bank accounts held with the ANZ and CBA and there were payments out of $179,456.23. There is no evidence before the Court as to the level of bitcoin deposits received and so such deposits are not included in that figure of $4,200,000.
77 There is no evidence of profit - this was largely due to the fact that Diverse Link did not co-operate in relation to the proceedings. The principle which is relevant to the significance of the profit figure was outlined in viagogo AG v Australian Competition and Consumer Commission [2022] FCAFC 87 at [162] (per Yates, Abraham and Cheeseman JJ), where their Honours observed:
[W]e accept … that it is a distraction to observe that the authorities often express the cost of doing business principle by reference to "profit". The word "profit" is not used in the authorities in a limited or technical way to describe the profits reported by the contravenor. Rather, profit describes the wide array of benefits flowing to the contravenor which will inform the risk/benefit calculus undertaken by the contravenor; were it otherwise, the principle would be denuded of effect except in cases where the benefits accruing to the contravenor were limited solely to the profits reported on the contravenor's balance sheet. That is why the principle is often expressed by reference to "putting a price on contraventions", or to "benefit", "gain" or "revenue".
(citations omitted)
78 As to the factors, in summary, I have relevantly concluded that the conduct was serious and was so viewed by the Legislature which enacted legislation with increased penalties and included a provision that each day constituted an additional contravention so as to enable the imposition of penalties which would be of sufficient deterrence. I have also had regard to the maximum penalty, over $3 billion, but have taken into account that this is but one yardstick that must be applied and should not be applied mechanically. As to the nature and extent of any loss suffered, I have taken into account the likelihood of actual loss being suffered as a result of gambling losses, as reflected in the complaints which were received with respect to Redraw Poker clubs, but also the loss and damage suffered because of the contravention in the form of general detriment and damage suffered by the community due to the impact of exposing Australians to unregulated and illegal interactive gambling activities which can lead to consequences associated with problem gambling. I note that the particular contravention was clearly deliberate and that Diverse Link has not co-operated with the ACMA either during the investigation or in the context of the Court proceedings. It is irrelevant that there is limited likelihood of recovery against Diverse Link as this is a factor of little weight against the compelling need for general deterrence.
79 The penalty will not be effective as a general deterrent if it is at a level which could be funded as a cost of doing business. So, if the level of the penalty were fixed at a figure less than the amount received by the contravenor, the object of general deterrence would not be achieved because it could be funded by the money taken by the contravenor as part of the contravention. A penalty at a lesser level would, in effect, mean that the contravenor might take the risk of detection on the basis that, if detected, the penalty could be covered from gross receipts of the contravention. That clearly does not achieve the outcome of general deterrence.
80 I have accepted that the moneys paid into the two bank accounts, approximately $4,200,000, are referrable to the contravention. It is also the case that payments by bitcoin were an alternative method of payment and there is no evidence (due to the non-co-operation of Diverse Link) as to the amount of money paid in that way.
81 A penalty less than the amount received (a minimum of $4,200,000) does not, in my opinion, achieve the important objective of general deterrence.
82 The ACMA submitted that a penalty of $5,000,000 is appropriate in the current circumstances. I conclude that a penalty of $5,000,000 is appropriate in the current case. A penalty at that level is, on the evidence before me, more than merely the cost of doing business and will give effect to the purpose of general deterrence. The figure is at a level which is greater than the funds received as a result of the contraventions. The level is, in my view, sufficiently high to deter others who might be tempted to contravene, but is not at a level that could, in my view, be described as oppressive. The figure is not greater than necessary to achieve the object of general deterrence.
83 I have taken note of the fact that the importance of general deterrence in this case is underscored by the fact that these are the first civil penalty proceedings in respect of s 15(2A) of the IGA.
84 As was said in Australian Competition and Consumer Commission v High Adventure Pty Ltd (2006) ATPR ¶42-091; [2005] FCAFC 247 at [11] (per Heerey, Finkelstein and Allsop JJ (as he then was)):
[A]s deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. In some cases the penalty may be so high that the offender will become insolvent. That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined.
85 I will therefore order that Diverse Link pay to the Commonwealth a penalty for the contraventions of s 15(2A) of the Interactive Gambling Act 2001 (Cth) in the sum of $5,000,000.00.
I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thomas.