Ladbrokes Digital Australia Pty Ltd v Liquor & Gaming NSW

Court of Criminal Appeal (NSW)|2018-06-25|Before: Wilson J, Lonergan J

Solicitors: MinterEllison (Appellant) Hunt & Hunt (Respondent) File Number(s): 2016/221162 Decision under appeal Court or tribunal: District Court of NSW Jurisdiction: Criminal Date of Decision: 13 March 2018 Before: Blackmore SC DCJ File Number(s): 2016/221162

HEADNOTE [This headnote is not to be read as part of the decision] The stated case turned on the meaning to be ascribed to the phrase "offers an inducement" as it appeared in the then cl 12(1)(h). Ladbrokes Digital Australia Pty Ltd ("Ladbrokes") is a licensed wagering operator which conducts a wagering business that accepts bets on horse and dog racing and other events. As a licensed wagering operator, Ladbrokes was permitted, by s 30(2) of the Betting and Racing Act 1998, to advertise its gambling products. Between 4 March 2016 and 30 June 2016, Ladbrokes made two features - Odds Boost and Odds Boost Extra Racing ("Odds Boost features") - available to customers in all Australian jurisdictions. Odds Boost allowed an individual who was betting on a particular race to obtain odds for a particular horse or dog in that particular race that was more favourable than the odds he or she would otherwise obtain from Ladbrokes, and was available once per day. Odds Boost Extra Racing allowed an individual to obtain odds with respect to one of a number of pre-selected racing events better than those that he or she would otherwise obtain from Ladbrokes. This was available once per event and potentially on multiple events per day. To obtain the benefit of the Odds Boost features, individuals were required to have, or to open, a Ladbrokes betting account, select the Odds Boost button and place a bet. Throughout 2016, Ladbrokes advertised its Odds Boost features in the Sydney Morning Herald, on its website and on its YouTube channel. Ladbrokes was convicted in the Local Court of New South Wales of 10 counts of publishing gambling-related advertisements contrary to cl 12(1)(h) of the Betting & Racing Regulation 2012 (NSW) ("the Regulation") (since repealed). Clause 12(1)(h) prohibited the publication of any gambling advertising "… that offers any inducement to participate, or to participate frequently, in any gambling activity …". The convictions were upheld by the District Court of New South Wales following the determination of an appeal brought by Ladbrokes. At the request of Ladbrokes, a District Court Judge stated a case to the Court of Criminal Appeal pursuant to s 5B(1) of the Criminal Appeal Act 1912 (NSW). Three questions of law were submitted for determination. The questions considered by the CCA were: (1) Was any of the gambling advertising … capable of being held to offer an inducement of the kind referred to in cl 12(1)(h) …? (2) Does gambling advertising … which advertises a feature that allows the customer to obtain, once per day or once per race or sporting event, more favourable odds than the customer might otherwise obtain … the use of which the customer can only obtain if he or she has or opens a betting account … offer an inducement of the kind identified in cl 12(1)(h) …? (3) Was any of the appellant's advertising … capable of contravening cl 12(1)(h) …? The appellant submitted that an "offer of inducement" must "offer some tangible, discrete or quantifiable 'extra' benefit….extraneous to a betting transaction". The respondent argued that the Odds Boost features - offered on top of odds ordinarily available - were an incentive, or "inducement", that Ladbrokes advertised to influence individuals to open a betting account, a current betting account being required before being able to take advantage of the Odds Boost features. Held: per Simpson AJA (Wilson and Lonergan JJ agreeing): In the context of the relevant legislation, an "inducement" must be something extraneous to the product ordinarily made available. The Odds Boost features were an integral part of Ladbrokes' gambling products which it was permitted to advertise. The Court therefore answered all questions in the negative. The convictions entered in the Local Court and upheld in the District Court were quashed.

Judgment

SIMPSON AJA: These proceedings come to the Court by way of case stated by a judge of the District Court pursuant to s 5B of the Criminal Appeal Act 1912 (NSW), following conviction of the appellant (Ladbrokes Digital Australia Pty Ltd) in the Local Court on 10 charges brought under cl 12(1)(h) of the Betting and Racing Regulation 2012 (NSW) ("the Regulation"). The convictions were upheld on appeal to the District Court. At the relevant time, cl 12(1)(h) of the Regulation prohibited "a licensed wagering operator" (and specified others) publishing any "gambling advertising": "… that offers any inducement to participate, or to participate frequently, in any gambling activity (including an inducement to open a betting account).
At the request of the appellant, his Honour Judge Blackmore SC DCJ, submitted three questions of law for determination. They are set out below.
The questions of law concern the meaning to be ascribed to the apparently innocuous and uncontentious collocation of words "offers an inducement" as it appears in cl 12(1)(h). Apparently innocuous and uncontentious though the collocation of words may be, the answers to the questions of law raised are anything but easy. There is much to be said on each side of the debate; the arguments are finely balanced.

The jurisdiction of this Court

The District Court has "a criminal and special jurisdiction" to entertain certain appeals against criminal convictions in the Local Court: Crimes (Appeal and Review) Act 2001 (NSW), ss 11 and 18. By s 5B(1) of the Criminal Appeal Act, a judge of the District Court may submit any question of law arising for determination on any such appeal to this Court, which may make any order or give any direction to the District Court as it thinks fit.
By subs (2) that jurisdiction extends to appeals that have been disposed of, provided that the question of law is submitted no later than 28 days from the end of the District Court proceedings, or in such longer period as this Court may allow.
By s 5B(3) of the Criminal Appeal Act, in connection with the determination of a question of law submitted in proceedings which have been disposed of, this Court may quash any acquittal, conviction or sentence of the District Court following appeal to that court.
The questions of law involved were not submitted within the prescribed period. The appellant therefore seeks an extension of time. An adequate explanation has been given for the failure to submit the question within the statutory period, and, there being no opposition from the respondent, it is appropriate to extend the time. In this respect, apart from the satisfactory explanation for the delay, it is relevant that it is in the interests of both parties that the questions be resolved as they have ongoing significance.
Blackmore SC DCJ, as he was required to do, set out the relevant facts. They are stated as follows:

FACTS "4. At all material times (between 4 March 2016 and 30 June 2016). Ladbrokes was a licensed wagering operator holding a licence to carry out wagering operations granted by the Norfolk Island Gaming Authority pursuant to sections 8 and 19A of the Bookmakers and Betting Exchange Act 1998 (NI). 5. Ladbrokes conducts a wagering business accepting bets on horse and dog racing and other sporting events, using its website www.ladbrokes.com.au, mobile phone applications and via telephone. 6. When Ladbrokes conducts its wagering business through the website: A. Ladbrokes requires that prior to betting with it, all customers and potential customers join or take out a betting account, through which Ladbrokes accepts bets and pays winnings; B. Ladbrokes accepts wagers on racing and other sporting events in Australia and abroad; C. Ladbrokes conducts transactions with clients; and D. Ladbrokes provides information about its operations including its terms and conditions, betting rules, promotions and information about events. 7. In the period 4 March 2016 to 30 June 2016, Ladbrokes made the following features available to customers in all Australian jurisdictions including New South Wales: A. "Odds Boost", which allowed an individual who was betting on a particular race to obtain odds for a particular horse or dog in that particular race that was more favourable than the odds he or she would otherwise obtain from Ladbrokes. An individual could use the "Odds Boost" feature once per day. B. "Odds Boost Extra Racing", which allowed an individual to obtain better odds with respect to one of a number of pre-selected racing events than those he or she would otherwise obtain from Ladbrokes. It was available in addition to "Odds Boost". "Odds Boost Extra Racing" could be used once per event on which it was available. "Odds Boost Extra Racing" was available on events selected by Ladbrokes and was available from time to time potentially on multiple events per day. 8. To obtain the benefit of the "Odds Boost" feature, a person was required: A. either to already have or to open a new Ladbrokes betting account; and B. to select the "Odds Boost" button on the Ladbrokes online betslip; and C. to place a bet at the better odds offered as a result. 9. On 11 March 2016, Ladbrokes caused gambling advertising in the form of three separate advertisements, each titled "Odds Boost", to be published on pages 2, 23 and 24 of the newspaper publication "The Sydney Morning Herald Racing Form Guide". [1] 10. On each of 4 March 2016, 10 March 2016, 27 May 2016 and 29 June 2016, Ladbrokes published on its website gambling advertising relating to its "Odds Boost" feature. [2] 11. On 29 June 2016, Ladbrokes published on its website gambling advertising relating to its "Odds Boost Extra Racing" feature. [3] 12. Between 29 February 2016 and 10 March 2016, Ladbrokes published on its YouTube Channel https://www.youtube.com/users/ladbrokes videos relating to the "Odds Boost" feature. [4] 13. On 29 June 2016, Ladbrokes published on its website gambling advertising relating to the rolling out of "Odds Boost Extra Sports". [5] "Odds Boost Extra Sports", once made available, was a feature that allowed an individual to obtain more favourable odds in respect of a particular sporting event. However, it was not available to customers as at 29 June 2016. It was first made available to customers on 24 August 2016 . Footnotes: 1. Copies of the three advertisements are at Annexure A. These were the subject of CAN 5, CAN 6 and CAN 7 respectively, copies of which are at Annexure G. 2. Copies of screenshots of the advertisement taken from the www.ladbrokes.com.au website on 4 March 2016, 10 March 2016, 27 May 2016 and 29 June 2016 are at Annexure B. These were the subject of CAN 1, CAN 2, CAN 3 and CAN 4 respectively, copies of which are at Annexure F. 3. A copy of a screenshot of the advertisement taken from the www.ladbrokes.com.au website on 29 June 2016 is at Annexure C. This was the subject of CAN 9, a copy of which is at Annexure I. 4. A DVD containing a recording of the videos is Annexure D. This was the subject of CAN 8, a copy of which is at Annexure H. 5. A copy of a screenshot of the advertisement taken from the www.ladbrokes.com.au website on 29 June 2016 is at Annexure E. This was the subject of CAN 10, a copy of which is at Annexure J." As the footnotes indicate, copies of the advertisements referred to in paragraphs 9 to 13 were annexed to the stated case.

The three questions of law submitted by Blackmore SC DCJ for the determination of this Court are formulated as follows: "1. Was any of the gambling advertising referred to in paragraphs 9-13 above capable of being held to offer an "inducement" of the kind referred to in cl 12(1)(h) of the Regulation? 2. Does gambling advertising by a licensed wagering operator which advertises a feature that allows the customer to obtain, once per day, or once per race or sporting event, more favourable odds than the customer might otherwise obtain from the operator, the use of which the customer can only obtain if he or she has or opens a betting account with the operator, offer an inducement of the kind identified in clause 12(1)(h) of the Regulations? 3. Was any of the gambling advertising referred to in paragraphs 9-13 above capable of contravening cl 12(1)(h) of the Regulation?"
The answer to each question depends upon what is encompassed in the collocation of words "offers any inducement". The appellant urges that questions 1 and 2 be answered "No", and, if it is considered necessary to answer question 3, that question also be answered "No". The respondent urges that each question be answered "Yes".
The respondent contends: (i) that the more favourable odds made available, over and above the odds ordinarily available and made available once per day in the case of "Odds Boost", and once per event in the case of "Odds Boost Extra Racing", was an inducement to participate, or to participate frequently, in a gambling activity; and (ii) that each advertisement was "gambling advertising" that constituted an offer of that inducement.
The appellant's contention (as I understand it) is, simply, that an inducement must be something extraneous to the product ordinarily made available, offered in exchange for participating or participating frequently in gambling activity and that, in each case, what was offered was part of the product, and not something additional to it, such as to amount to an inducement. The "product" was the opportunity to place bets (at odds specified by the appellant) with the chance of winning.
It is important to note that, although in ordinary language the use (and the very purpose) of advertising might be seen as directed to inducing recipients of the advertising to take up the product offered, that does not assist in the construction of cl 12(1)(h). That is because, as will be seen in the survey of the relevant legislation that follows, there is no general prohibition on the advertising of gambling products by licensed wagering operators. Accordingly, it would be too simplistic to conclude that the advertisements constituted an inducement to participate, or participate frequently, in any gambling activity and therefore came within the prohibition imposed by cl 12(1)(h).
It is time to turn to the relevant legislation, which is not without complexity. The complexity is probably due to the conflicting governmental imperatives or interests that underlie the legislation: on the one hand, protection of vulnerable gamblers/citizens from succumbing to the lure of illusory or hard to obtain riches and the recognition of harm that can eventuate from uncontrolled gambling; on the other hand, the lure of the revenue to be gained from imposts on gambling enterprises. This is no mere speculation: the conflict is spelled out in s 3 of the Betting and Racing Act 1998 (NSW), to which I will shortly turn to.

The relevant legislation

The relevant terms of cl 12(1)(h) are: A … licensed wagering operator … must not publish any gambling advertising: … (h) that offers any inducement to participate, or to participate frequently, in any gambling activity (including an inducement to open a betting account).
"Gambling advertising" is defined in cl 11 as: advertising that gives publicity to, or otherwise promotes or is intended to promote, participation in gambling activities …
The Regulation contains no definition of "inducement" or "offers an inducement". Nor do the Regulation or the Act define "gambling activity".
Apart from cl 12(1)(h) of the Regulation, the relevant legislation is the Betting and Racing Act 1998 ("the Act") (formerly known as the Racing Administration Act 1998 (NSW)). Section 3 of the Act states its objects as: (a) to ensure the integrity of racing in the public interest, (b) to ensure that certain betting activities by licensed bookmakers are conducted properly, (c) to minimise the adverse social effects of lawful gambling, (d) to protect a source of public revenue that is derived from lawful gambling. There is an obvious tension between objects (c) and (d).
Part 4 of the Act is concerned with "Betting Information and Advertising". In s 27 thereof relevant terms are defined. "Betting information" is defined to include: …information or advice as to: (a) the betting or betting odds on any race that is to be held at a race meeting, or (b) the betting or betting odds on a declared betting event that is to be held.
Section 29(1) prohibits the publication, by "a person", of "any betting information". However, subs (2) expressly excludes from the operation of subs (1) the prohibition of, relevantly: (a) betting information relating to a licensed betting service provider. …
Section 30 deals with "Advertising betting information and betting services". Subsection (1) prohibits the publication, by "a person" of advertisements: … (a) indicating that the person (or any other person) is prepared: (i) to provide betting information, or (ii) to bet on any race that is to be held at a race meeting, or (iii) to bet on any declared betting event, or (b) that is designed to induce a person to obtain betting information, or (c) that invites any person to make, or take a share in, a bet on any race or declared betting event, or (d) that relates to any gambling operations or services carried on by a person who is not a licensed bookmaker. … But, again, subs (2) expressly excludes from the operation of subs (1): …the publication of an advertisement relating to a licensed betting service provider.
Subsection (2A) provides: This section does not limit the operation of any regulations relating to responsible practices in the conduct of betting, including regulations restricting or prohibiting the conduct of promotions or other activities (including advertising). It was common ground that cl 12(1)(h) of the Regulation is a regulation relating to "responsible practices in the conduct of betting", within the meaning of subs (2A).
Section 37 provides, in general and familiar terms, for the making of regulations not inconsistent with the Act, and, in subs (4), expressly permits the making of regulations making provision for or with respect to (inter alia): (a) restricting or prohibiting the conduct of promotions or other activities (including advertising). …
The Regulation was made in 2004 and relevantly amended in 2015. Clause 11 of the relevant version of the Regulation defines "gambling advertising" (for the purposes of Part 2, Division 2 of the Regulation in which cl 12 appears) as: … advertising that gives publicity to, or otherwise promotes or is intended to promote, participation in gambling activities, [but excludes certain forms of advertising not presently relevant].
It will be observed that ss 29(2) and 30(2) exempt "licensed betting service providers" from the prohibitions contained in subs (1) of each provision. That term is not otherwise defined in the Act. In s 4(1), "betting service" is defined as: A bookmaker, a person who operates a totalisator or a person who operates a betting exchange.
It will be recalled that the prohibition imposed by cl 12(1)(h) is directed to "licensed wagering operator[s]", and that the appellant was found by the primary judge to have been a licensed wagering operator, licensed under Norfolk Island legislation. Nowhere in the Act or the Regulation are "wagering operator" or "licensed wagering operator" defined. It was, however, common ground that, for the purposes of ss 29 30, the appellant was a licensed betting service provider, and entitled to the exemptions provided in those sections.
It was contended on behalf of the appellant, and not contested by the respondent, that a definition of "licensed wagering operator" that appeared in s 27 of the Racing Administration Act until its removal in 2014 (Racing Administration Amendment (Sports Betting National Operational Model) Act 2014 (NSW)) was applicable. "Licensed wagering operator" was there defined as: …a wagering operator that holds a licence or authority (however described) under the legislation of this or any other State or Territory to carry out its wagering operations (whether in that State or Territory or elsewhere).
Despite the varying language of the legislation, it was not in issue that the appellant was a "licensed wagering operator" for the purpose of cl 12(1)(h) of the Regulation, entitled to the exemptions provided to "licensed betting service providers" by subss 29(2) and 30(2), but otherwise subject to the prohibitions contained in cl 12(1). The terms "licensed wagering operator" and "licensed betting service provider" appear to have been used interchangeably.

The Appellant

As indicated above, the central tenet of the appellant's argument was that to "offer an inducement" to participate, or to participate frequently, in any gambling activity involves the offer of something additional and extraneous to the gambling product the subject of the advertising. The appellant put its submissions this way: "41. …for gambling advertising to 'offer any inducement' of the kind referred to in cl 12(1)(h) of the Regulation, the advertising must at least: (a) offer some tangible, discrete or quantifiable 'extra' benefit, which is extraneous to a betting transaction: and (b) offer that benefit in exchange for participating, or participating frequently, in gambling activity, including in exchange for opening a betting account."
The appellant sought to support its argument in a number of ways. First, it relied on the text of cl 12(1)(h). In the absence of any statutory definition, the appellant began by referring to the Macquarie Dictionary definition of "inducement". That Dictionary contains a number of definitions, of which those relied on by the appellant are: "1. The act of inducing … 2. Something that induces or persuades; an incentive."
The verb "induce" is relevantly defined as: "1. To lead or move by persuasion or influence, as to some action, state of mind, etc … 2. To bring about, produce or cause …" However, the appellant argued that, for a number of reasons, the Dictionary definition cannot be the meaning to be attributed to "offers an inducement" as it appears in the clause.
The appellant drew a distinction between "offer[ing] an inducement" and "in induc[ing]". To construe "offers an inducement" as the equivalent of "induces", it submitted, would give the words "offers an" no work to do. As an accepted principle of statutory construction, legislative provisions should be construed, so far as possible, to give every word work to do: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. Moreover, such a construction would effectively prohibit gambling advertising - something that, as can be seen from ss 29(2) and 30(2), the legislation does not do.
The appellant then turned to what it called "context". It again invoked ss 29 and 30 of the Act, for the proposition that a licensed wagering operator is not prohibited from advertising its products. (As the respondent pointed out, this is no more than a restatement, in different terms, of the preceding proposition).
Finally, the appellant pointed to some legislative history. Immediately prior to its insertion in the Regulation in 2015 (Racing Administration Amendment Regulation 2015 (NSW)) the prohibition in cl 12(1)(h) was on any gambling advertising: (h) that offers any credit, voucher or reward as an inducement to participate, or to participate frequently, in any gambling activity (including as an inducement to open a betting account).
The appellant acknowledged that the new form of wording is not limited to the offer of "any credit, voucher or reward" but stopped short of accepting that the effect of the amendment was expansionary. It pointed to the Explanatory Notes provided when the amendment was introduced, which stated that the purpose of the amendment was: "…to clarify that any inducement to participate in gambling activities is prohibited in gambling advertising."
In this context, the appellant sought to draw comfort from the provisions of cl 13 of the Regulation, which provides: 13 Gambling inducements A non-proprietary association or licensed bookmaker, or an employee or agent of a non-proprietary association or licensed bookmaker, must not offer or supply any free or discounted liquor or an inducement to participate, or to participate frequently, in any gambling activity conducted at a racecourse.
This, the appellant contended, gave support for its proposition that an inducement must be something extraneous or additional to a betting transaction.

The Respondent

The respondent also referred to the Macquarie Dictionary definition, but argued that the second meaning is "the more apposite" - that is, an inducement is "something that induces or persuades, an incentive". It argued that "the Odds Boost Products are each an inducement" on that definition. The Odds Boost features, the respondent contended, provide an incentive to place a bet at least once a day, or on a particular event.
The respondent referred to the decision of the Full Court of the Federal Court of Australia in The Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153; [1986] FCA 72. There, the meaning of "inducement" arose in the context of the Trade Practices Act 1974 (Cth), which (apparently - in this respect the judgment is a little obscure) prohibited, inter alia, a supplier of goods inducing or attempting to induce another person selling the goods at a price lower than that specified by the supplier. A supplier of goods had suggested that, if a retailer did not sell the goods at the price it recommended, the supplier might cut off the supply of goods to the retailer. A judge of the Federal Court of Australia found that that suggestion amounted to an inducement within the meaning of the relevant legislation. That decision was upheld by the Full Court. At 164 of the Report, Pincus J considered the meaning of "inducement" and said: "Counsel argued that there must be an 'inducement' as that word is commonly used in the law. It is true that the word ordinarily refers to some proffered advantage or disadvantage, promised or threatened, to follow from following or failing to follow a stipulated course of action. There is no reason, however, to read into [the relevant legislation] a necessity to find that anything is offered in exchange, so to speak, for not discounting; mere persuasion, with no promise or threat, may well be an attempt to induce."
His Honour went on to find that it appeared that there was, in fact, an inducement by way of a threat to discontinue supplies.
It appears that the respondent relied upon this passage in support of a proposition that "some proffered advantage or disadvantage" would suffice to constitute an inducement and that the Odds Boost features were such an inducement.
The respondent went on to submit: "34. Whether a product is itself an inducement to participate, or participate frequently, in any gambling activity will depend upon whether the nature and characteristics of the product are such that a person can only get the benefit of the product by participating, or participating frequently, in any gambling activity. … 35. To offer a product the nature or characteristics of which are such that it is not itself a stand-alone gambling activity but rather a feature the benefit of which a person can only obtain by participating, or participating frequently, in any gambling activity is to offer an inducement of the kind contemplated by cl 12(1)(h). To publish gambling advertising that offers such a product offends the prohibition in cl 12(1)(h)."
The respondent then argued that: "36. The nature or characteristics of the Odds Boost Products are such that they operate as an inducement to participate, or to participate frequently, in gambling activities … First, they are not stand-alone gambling products. A person cannot obtain the benefit of the Odds Boost Products of themselves. To put it another way, it is doubtful that the Odds Boost Products are themselves a gambling activity."
The respondent then put a somewhat elusive argument, which I quote: "37 …the Odds Boost Products are unable to be 'banked' or 'accumulated' over time. In the case of Odds Boost, the person must use the product and place a bet at the boosted odds once per day every day to get the full benefit of the products. In the case of Odds Boost Extra Racing and Odds Boost Extra Sports, the person must use the product and place a bet on the boosted odds once per each nominated racing or sporting event as the case may be to get the full benefit of the products. In this way, the Odds Boost Products operate to induce persons to participate in the placing of bets more frequently than the person might otherwise do if not for the opportunity to obtain more favourable odds by the use of the Odds Boost Products."
The respondent disputed the appellant's contention that a construction of "offers an inducement" that does not incorporate some advantage or benefit extraneous to the product advertised would give the words "offers an" no work to do. It contended that: "39. …It is sufficient for the advertising to identify something and hold it out as an advantage to follow from participating in gambling activity. That is precisely what the gambling advertising did in this case. It identified the relevant Odds Boost product and held it out as an advantage that a person would receive provided the person has or opens a betting account with the appellant and places a bet once per day, or once per racing or sporting event."
The respondent also disputed the appellant's contention that to construe cl 12(1)(h) as prohibiting advertising of its Odds Boost Products would amount to a complete ban on advertising gambling products. It submitted: "42. The appellant's assertion … incorrectly conflates the concept of gambling advertising, which is concerned merely with the promotion of gambling activities, with the concept of advertising that offers some additional advantage that a person will receive if the person participates in gambling activities. In the present case, the additional advantage offered in the gambling advertising was the promise of more favourable odds than the customer might otherwise obtain from the appellant."
The respondent, like the appellant, referred to the objects of the legislation, as stated in s 3 of the Act, contending that the construction favoured by the appellant would defeat the object of minimising the social harm caused by gambling. It gave as examples: …innumerable variations on "fifth bet for free", changing [sic - charging] only 50 cents in the dollar for the first $10 dollars of bets each day … as conduct that would be permitted on the appellant's construction. The respondent characterised the appellant's fundamental argument, that an "inducement" must be something extraneous to the gambling product, as creating "an artificial distinction" that fails to advance the object of the prohibition.
The respondent took issue with the appellant's reliance on cl 13 of the Regulation. It pointed out that cl 13 applies to non-proprietary associations and licensed bookmakers, but not to licensed betting service providers or wagering operators and it does not apply to gambling advertising.
The respondent described the appellant's reliance on ss 29 and 30 of the Act as "misplaced". (The appellant had relied on each of these provisions as an "important consideration of context", indicating that cl 12(1)(h) does not operate as a prohibition against advertising gambling activities by licensed wagering operators). The respondent pointed out that s 29 is concerned with the publication of "betting information" (as defined) which does not include advertising.
Finally, the respondent answered the appellant's contention concerning the legislative history of cl 12(1)(h) by arguing that the purpose of the amendment was to expand the activities covered by the prohibition.

Resolution

As I have indicated above, the resolution of these matters is not simple, and the competing arguments on each side have force. There were, however, some distractions in the arguments advanced.
For example, a side issue developed concerning the relevance of ss 29 and 30 of the Act. The appellant's reliance on those provisions as "important considerations of context" was directed to the proposition that cl 12(1)(h) could not be construed as prohibiting any gambling advertised by licensed wagering operators or licensed betting service providers. The respondent (correctly) pointed out that s 29 has no direct application, since it is concerned with the publication of betting information as defined in s 27, and it was not contended that the advertisements in question fall within that definition. The issue was a distraction because the proposition for which the appellant invoked ss 29 and 30 - that cl 12(1)(h) does not operate to prohibit any gambling advertising by licensed betting service providers or licensed wagering operators - was uncontested and was, indeed, common ground.
Resolution of the issues depends upon two things: identification of the essential facts, and the meaning to be ascribed to the words "offers an inducement".
The essential facts, drawn from the stated case, as found by Blackmore SC DCJ are:
all customers of the appellant are required to take out a betting account (stated case, para 6A);
once a customer has taken out an account, he or she may place bets on racing or other sporting events at odds determined from time to time and offered by the appellant; and
the odds offered by the appellant include the Odds Boost and Odds Boost Extra Racing features; that is, on a limited number of occasions, the appellant offers to a customer odds more favourable than it otherwise does.
The proper characterisation of the account is that it represents a contract, agreement or arrangement between the appellant and the customer. The terms of the contract, agreement or arrangement include the availability of the Odds Boost features.
Although there is no definition of "gambling activity", the product offered by the appellant to existing and potential customers was the opportunity to place bets in accordance with the contract, agreement or arrangement. The product was the opportunity to participate in gambling activity. Incorporated in that product was an opportunity to place bets at more favourable odds than would otherwise be available, but only on a limited number of occasions. That feature was a component of the product offered; it was not separate and distinct from the product offered.
There was an internal contradiction in the respondent's argument. On the one hand, it referred to "the Odds Boost Products"; on the other (for example, at [36] of its written submissions, extracted above at [45]) it contended that they were not "stand alone gambling products" and that it was doubtful that they were a gambling activity.
Either way, the argument fails. Either "the Odds Boost Products" were themselves a gambling activity, (and permitted to be advertised), or they were not. If they were not, they were an integral part of the gambling activity offered by the appellants. They could not be used except in association with the gambling activity offered. The respondent was correct to contend that they were not "stand alone gambling products"; but the question then arises: what were they? The answer is that they were part of the gambling activity legitimately advertised. It is of some importance, in this debate, that the finding of fact made by the primary judge was that they were "features". I take that to mean that Odds Boost and Odds Boost Extra Racing were offered as characteristics of the gambling activities.
The respondent further placed reliance on the fact (as found by the primary judge) that a customer is required to have a betting account before being able to take advantage of the Odds Boost products. That is true, but it is irrelevant. As indicated in the stated case, a customer is required to have an account before participating in the gambling activity offered by the appellant; the requirement that a customer have an account is immaterial to whether or not the advertisements offered an inducement to participate (or participate frequently) in any gambling activity.
The fallacy in the respondent's argument is exposed most clearly at [34] and [35] of its submissions (extracted at [44] above). The respondent there submitted that: "Whether a product is itself an inducement to participate … in any gambling activity will depend upon whether the nature and characteristics of the product are such that a person can only get the benefit of the product by participating … in any gambling activity …"
The product offered was a gambling activity which the appellant was entitled to advertise. Its "nature and characteristics" included the Odds Boost features; in order to avail himself or herself of the product offered, the recipient of the advertising necessarily must participate (even if not frequently) in a gambling activity. But the same can be said of any gambling activity; no person can obtain the benefit of a gambling activity product other than by participating in that gambling activity. If the respondent's argument were correct, every advertisement of a gambling activity would be an inducement to participate in a gambling activity (and prohibited by cl 12(1)(h)). It was not the respondent's contention that that was the case.
Advertising is, by its very nature, intended to "induce' its recipients to purchase or consume the product advertised. That is, the advertising is designed to persuade or influence its recipients to purchase or consume the product advertised. Ordinarily, or at least frequently, the inducement is the nature and quality of the product itself (or, to adopt the respondent's language, "the nature and characteristics" of the product). But it is not uncommon for an additional inducement to be offered: tickets to a sporting or cultural event, a bonus coffee cup, the opportunity to be placed in a draw for glittering prizes, or the once ubiquitous set of steak knives. It is this latter kind of inducement that is prohibited by cl 12(1)(h).
If the inducement were the product itself - in this case the opportunity to participate in gambling activity offered by the appellant - advertising any form of gambling activity would be caught by the prohibition. And it was common ground that cl 12(1)(h) does not do that.
The appellant is correct in its contention that, to constitute "an inducement" within the meaning of cl 12(1)(h), what is offered must be something over and above, and separate from, the product advertised. The Odds Boost features were not over and above, and separate from, the product the appellant offered; they were an integral part of it. While they may have (in ordinary language) persuaded or attracted recipients or customers to participate in the gambling activity offered by the appellant, they did so because the nature and quality of the product was presented as attractive to those recipients who responded.
Once it is accepted that the Odds Boost features are part of the product offered by the appellant (and advertised) it is apparent that there is no inducement, additional to the product itself, offered. It was the product itself, which was presented sufficiently attractively to recipients or customers that induced participation in gambling activity. Advertising that product was not prohibited. Offering a set of steak knives by way of incentive to participate may well have been prohibited.
If cl 12(1)(h) were to be construed to exclude advertising of an integral feature of the product being advertised, it is difficult to see how any advertisement of a gambling product would not also offer an inducement to gamble. To prohibit advertising of a feature of a product which is permitted to be advertised would cut across the permission given to licensed wagering operators by s 30(2) of the Act to advertise their products. For that reason, some departure is warranted (and necessary) from what might be seen as the ordinary and natural meaning of "offers any inducement". The inducement must be additional to the product being offered and advertised.
Accordingly, I would answer each question as proposed by the appellant.
The consequence is that the convictions must be quashed.
The orders I propose are:
Question 1 of the stated case: answer "no"; Question 2 of the stated case: answer "no"; Question 3 of the stated case: answer "no";
Each conviction entered in the Local Court and upheld in the District Court is quashed.
WILSON J: I agree with Simpson AJA.
LONERGAN J: I agree with Simpson AJA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 February 2019

Betting and Racing Regulation 2012(NSW)

Racing Administration Act 1998(NSW)

Racing Administration Amendment Regulation 2015(NSW)

Racing Administration Amendment (Sports Betting National Operational Model) Act 2014(NSW)

Trade Practices Act 1974(Cth)

Racing Regulation 2012(NSW)

(Racing Administration Amendment (Sports Betting National Operational Model) Act 2014(NSW)

(Racing Administration Amendment Regulation 2015(NSW)

At a glance

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Legislation Cited (11)

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