Office of Liquor Gaming and Racing v Tabcorp Holdings Limited - [2016] NSWLC 25 - NSWLC 2016 case summary — Zoe

NSWNSWLC

Office of Liquor Gaming and Racing v Tabcorp Holdings Limited

[2016] NSWLC 25

Local Court of NSW|2016-07-15

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At a glance

Source facts

Court

Local Court of NSW

Decision date

2016-07-15

Catchwords

CRIMINAL PROCEEDINGS - offences relating to publishing gambling related advertising - gambling activity - credit - reward - inducement

Source

Original judgment source is linked above.

Catchwords

CRIMINAL PROCEEDINGS - offences relating to publishing gambling related advertising - gambling activity - credit - reward - inducement

Judgment (23 paragraphs)

[1]

Solicitors: Hunt and Hunt Solicitors (for the prosecution) Gadens Solicitors (for the defendant) File Number(s): 2015/340513, 2015/340520, 2015/340529

[2]

Judgment

The Office of Liquor Gaming and Racing (OLGR) brings prosecutions against Tabcorp Holdings Limited (Tabcorp) for the offences of publishing gambling related advertising that offers a credit voucher or reward as an inducement to participate, or to participate frequently in any gambling activities, including as an inducement to open a betting account, in contravention of subclause 12(1)(h) of the Racing Administration Regulation 2012 (NSW) (as it was then known) in force as at 27 and 28 August 2015. It is convenient to provide herein the entirety of the relevant clause. 12 Prohibitions on gambling-related advertising (1) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any gambling advertising: (a) that encourages a breach of the law, or (b) that depicts children gambling, or (c) that is false, misleading or deceptive, or (d) that suggests that winning will be a definite outcome of participating in gambling activities, or (e) that suggests that participation in gambling activities is likely to improve a person's financial prospects, or (f) that promotes the consumption of alcohol while engaging in gambling activities, or (g) that is not published in accordance with decency, dignity and good taste and (in the case of a television commercial) in accordance with the Commercial Television Industry Code of Practice, registered by the Australian Communications and Media Authority, as in force at the time the gambling advertising is published, or (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). Maximum penalty: 50 penalty units. (2) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any gambling advertising in writing in a newspaper, magazine, poster or other printed form that does not contain the following: Think! About your choices Call Gambling Help 1800 858 858 Maximum penalty: 50 penalty units. (3) A person other than a non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any advertising that does any of the things referred to in sub clause (1) (a)-(h). Maximum penalty: 50 penalty units. (4) Sub clause (3) does not apply if the advertising relates to a non-proprietary association or licensed wagering operator and the publication of the advertising was approved in writing by the non-proprietary association or licensed wagering operator or an employee or agent of the non-proprietary association or licensed wagering operator. (5) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not enter into or extend the duration of any contract or arrangement for the publication of gambling advertising that does not comply with this clause. Maximum penalty: 50 penalty units.

[3]

Construction of the Legislation

The matters before the court carry monetary penalties of up to $5,500 upon conviction. Before embarking upon any factual determinations the court is urged to interpret or classify the nature of the legislation itself. There is a contest between the parties as to whether the regulations are punitive or beneficial in nature. Should the contentious parts of the regulations be read narrowly against the prosecution, given that breaches carry monetary penalty and potential reputational damage? Or is the legislation remedial or beneficial in nature, does it have a protective social function such that wide interpretations are appropriate?
Tabcorp contends that due to its punitive nature, any ambiguity in the legislation should be read narrowly against the prosecution. This was historically the position, as recalled by Kirby J in R v Lavender (2005) 222 CLR 67, given that in ages past the death penalty loomed large in the punitive regime, and the defendant was to be afforded the protection of a narrow construction against the prosecution. Such principles developed alongside the need to" level the field of combat" between the state and the defendant, to enhance the presumption of innocence, the right to silence and the need to put the Prosecution to strict proof. (at 89)
However, it is submitted by Mr Gray, and I accept, that the approach has changed over the years, particularly in light (again, per Kirby J in Lavender) of democratically elected parliaments and the proliferation of legislation that speak to so many aspects of everyday life. Thus, when legislation appears to address social ills, to set frameworks, to have a beneficial or protective purpose, strict construction against the prosecution is one of last resort: Waugh v Kippen (1986) 160 CLR 156 at 165.
Rather than comparing and contrasting each and all of the cases presented as support for the parties' positions, I turn to the decision of Spigelman CJ as he then was, in Roads and Traffic Authority of New South Wales v Baldock [2007] NSWCCA 35. His Honour offered a clear and measured approach in relation to statutory interpretation which I adopt hereunder.
He stated (at [15]) that: It is well established in Australian law that statutory interpretation requires a Court to have regard to the context of the legislation in the first instance and not merely after some kind of ambiguity is established. [emphasis added]
It is my firm view that on "both a broad and particular basis" the relevant parts of the Racing Administration Act and its regulations are concerned to address and alleviate the social ills that may flow from gambling advertising. As per the objects of the Act, it aims to "minimise the adverse social effects of lawful gambling". The regulation deals broadly with what is described in the explanatory note as responsible gambling practices.
The relevant parts of the Act and regulation for our purposes appear to delineate how and under what circumstances the public may be informed of gambling opportunities through the various advertising mediums - be that television, newspapers, posters within gambling establishments, magazines, or the internet.
Clearly, one of the most potentially destructive effects of gambling advertising is its ability to entice and capture those gamblers or would-be gamblers that are prone to addiction, over spending, and problematic gambling behaviours. Thus, when amendments to the Racing Administration Act in relation to the advertising of betting services were introduced to Parliament on behalf of the then Minister Ian McDonald in 2008, reference was made to recent advertisements by interstate betting operations that were offering inducements in the form of free bets to persons opening betting accounts. It was stated: The Government is concerned that such advertising may contribute to problem gambling by luring persons who can ill afford to bet or persons with a gambling problem to open betting accounts. The bill will address these concerns by amending the regulations to provide that wagering operators must not publish any gambling advertising that offers any credit, voucher or reward as an inducement to participate, or to participate frequently in any gambling activity, including offering an inducement to open a betting account. (New South Wales Legislative Council, Parliamentary Debates (Hansard), 25 November 2008)
Not only does clause 12 prohibit advertising of inducements to gamble, it prohibits the depiction of (inter alia) children gambling, the promotion of alcohol being consumed whilst gambling, and the suggestion that winning is a likely outcome or will make you financially better -off.
Other parts of the regulations require (inter alia) the provision of problem gambling brochures, warnings and information about gambling responsibly in multiple languages, and even the printing of warnings on every betting ticket issued.
It is in my view patently clear that the legislation is correctly described as beneficial in nature. Its provisions should be interpreted widely and embrace its focus on the protection of the public from gambling advertising that may contribute to the various social ills associated with problem gambling.

[6]

Offer

Much of the argument around these elements (in relation to this and other advertisements named in the CANs) revolves around the term "offer" at it appears in subclause 12(1)(h), and the way the term should be construed by the court vis-à-vis the advertisement itself. The court is not assisted by any definition within the Act or regulations themselves, and the parties have submitted that there is no previous judicial consideration of the term within the context of this legislation.
Tabcorp contends that the term should be narrowly construed against the prosecution, in accordance with their broad submission that any ambiguity in what they describe as this penal legislation should be read down to benefit the defendant.
It is thus submitted that the word "offer" should be interpreted as having a meaning more in line with that of the law of contract - the advertisement would have to display an offer immediately capable of acceptance, whereby the reader would need to be informed on the face of the advertisement exactly what needed to be done to be eligible to receive the benefit, and what benefit will be received if those things are done. As I understand the argument, Tabcorp suggests that the ads may fall short in this regard.
Mr Gray for the prosecution invites instead an interpretation more in line with the social or remedial nature of the regulations as I have found them to be. He argues that the regulations are akin to consumer laws, as they seek to set the parameters of permissible advertising and "protect" gamblers or potential gamblers from exposure to advertising that may promote the social ills connected with gambling behaviours. That is a contention that I entirely accept, given the finding that the court has made as to the purpose and nature of the legislation itself.
In that vein, the court was helpfully referred to Spender J's reasoning in Wallace v Walplan Pty Ltd (1985) 5 FCR 315- a prosecution under the Trade Practices Act 1974 (Cth) involving prohibition of "bait" advertising. There it was held that the word "offer" simply meant "to make available", that it was inappropriate in the context of consumer law and trade practices legislation to go beyond that non-technical meaning and venture into what offer may mean in the contractual sense.
I therefore accept the contention that the word "offer", in the context of these regulations, is not to be used in the strict contractual sense but used in the ordinary non-technical sense of "make available".
It is my firm view that clause 12 is explicitly focused on the gambling public as the consumer or potential consumer of the activity referred to in the gambling advertising. It is entirely appropriate to construe the term "offer" as simply to "make available".
The court is left in no doubt that the "Ignite your Friday night" promotion constitutes an "offer" according to that wider definition. It certainly "makes available" a gambling construct for the reader to participate in at the click of a button. In any event, even if the offer was viewed in a contractual sense, it is patently clear what the reader needs to do to get the benefit (place a bet in the first try scorers market) and what the benefit will be - 25% of the set price - if their player is indeed the first try scorer.
I find this element proven in relation to the 25% bonus bet advertisement.

[12]

Element 3 - The publication is gambling advertising

Tabcorp disputes this element in relation to all three promotions as above.
Clause 11 defines gambling advertising as "advertising that gives publicity to, or otherwise promotes or is intended to promote participation in gambling activities".
Tabcorp contends that the definition of gambling advertising encompasses placing a bet or opening a betting account, but that it does not mean any conduct associated with gambling. Again, it is submitted that it too wide a definition in favour of the prosecution.
According to Tabcorp, it cannot be the case that advertising the rewards programme and the various offers within it (Socceroo debut and owner for a day) incite betting or gambling per se, or is an inducement to open a betting account. Mr Lancaster submits (at T.58, 30): … there is no connection made between these benefits that come from being TAB rewards program on the one hand and laying a bet on the other hand.
There is, with respect, a basic flaw in this argument. It is patently clear from the material exhibited before me that in order to be a member of TAB Rewards and have the promotions available, a person must do one of two things - 1. Open a betting account; or 2. Bet in cash at participating venues.
These are absolutely necessary preconditions. They are found throughout the terms and conditions (as exhibited) that must be read in conjunction with the advertisements as exhibited. The reader is directed to them through the website promotions.
It is inconceivable that the promotions and terms and conditions of membership attached to them are mutually exclusive, or can be read in isolation. They must, to make any sense to the reader at all, be incorporated into the advertisement. What indeed would be the point of advertising membership of the rewards programme without telling the reader how to go about becoming a member?
It is in my view incontrovertible that the promotions are indeed gambling advertising- you cannot partake in the promotions unless you are a TAB Rewards member, to be a TAB Rewards member you must open a wagering account with TAB limited or bet in cash (and thus hold a Cash loyalty card) at participating TAB venues.
It is also clearly the case, as submitted by Mr Gray, that quite apart from the necessary preconditions of membership, the advertisements in and of themselves promoted wagering. Thus, in "make your Socceroo debut", placing a bet gets the reader an extra entry into the competition; in "owner for a day", the prize winner receives the equivalent points of any prize money won by the horse, which could be redeemed for bets or wagers. In the TAB Rewards programme, points are earned through placing of bets or wagers and could be redeemed for bets or wagers.
It is my firm view that the publications are indeed gambling advertising and that element number 3 is made out in relation to the rewards programme and offers within it.

[13]

Elements 4 and 5 - offers a credit voucher or reward as an inducement to participate or to participate frequently in betting activity, including to open a betting account.

These two elements are conveniently dealt with together. The prosecution must prove that each advertisement both offers a credit voucher or reward, and that that such a credit voucher or reward is an inducement to participate in gambling activity including to open a betting account.
Tabcorp contends that neither the "owner for a day "or "make your Socceroo debut" promotions, nor the TAB Rewards membership itself are an "offer" of a credit voucher or reward. It is contended that it is merely advertising that promotes membership of the rewards programme.
All the a TAB Rewards promotions appear as a matter of fact to offer rewards. On either a wide or restrictive view of the term "offer" as used in the section, the advertisements offer, to those people willing to sign up for membership, or those that are already members, the rewards as listed in the ads. It is crystal clear to the reader what needs to be done in order to participate, and what benefits exist as part of that participation.
TAB Rewards membership brings with it many and varied items - all of which are fundamentally and obviously couched in terms of "rewards". They are many and varied - VIP Tickets, hospitality in corporate suites, gift cards, merchandise, racing tickets and so on. A rewards member can make their Socceroo debut, or be an owner for a day. You must however be a TAB Rewards member to be involved; to do that you must either open a wagering account or have a cash loyalty card which comes from placing cash bets. It is crystal clear in my view that the Rewards program is advertised as an inducement to open an account or to bet - indeed you cannot participate in the potential spoils of membership without doing so.
Clearly the prosecution has made out both elements 4 and 5 in relation to the TAB rewards programme and the promotions within it.
I find each element in relation to the particular ads numbered 2, 3 and 4 made out in CAN A-1.

[19]

The defence: subclause 12(4)

In an interlocutory judgement on 15 July 2016 this court held that subclause 12(4) was indeed to be construed as a defence and not an element to be established and negatived by the prosecution. Tabcorp then went on to invoke the defence. It is in these terms - (4) Subclause (3) does not apply if the advertising relates to a non-proprietary association or licensed wagering operator and the publication of the advertising was approved in writing by the non-proprietary association or licensed wagering operator or an employee or agent of the non-proprietary association or licensed wagering operator.
It is Tabcorp's contention that even if (as I have found) the advertisements breach the regulations, the application of subclause 12(4) renders the findings nugatory. As I understand the submissions Tabcorp's position is as follows: 1. The advertising does relate to a licensed wagering operator - TAB Limited. This is conceded by the prosecution and without controversy and is clear on the face of each of the adverts that they relate to TAB Limited. 2. The publication of the advertisements was, in each instance approved in writing; and this was done 3. By an employee or agent of TAB Limited - in the form of Tab Limited's legal counsel.
Each of these propositions must be dealt with in turn. Before doing that, I pause to make these observations - the exercise that the court is being asked to embark upon here involves inferences being drawn vis-à-vis Tabcorp, its corporate regime and employees in the form of legal counsel within and apparently across its various subsidiaries.
At first blush, these propositions do not sit comfortably with the fairly straight-forward wording of the clause itself. As Mr Gray for OLGR contended, the clause appears simply to address the actual publishers of the advertisements (newspapers, magazines, internet sites). It seeks in my view to remove the prospect of prosecution for those entities as long as they have approval in writing from those that placed the ad. Reading on to subclause 12(5) lends weight to this observation. It states: (5) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not enter into or extend the duration of any contract or arrangement for the publication of gambling advertising that does not comply with this clause. [emphasis added]
In my view, this subclause, when read as it must be together with the whole of the clause, and particularly with subclause 12(4), speaks to the arrangements (contractual or otherwise) between the publishers and the licensed wagering operator vis-à-vis the placements of the advertisements themselves.
That being said, Tabcorp is named as the domain name holder for the internet advertisements relating to TAB Limited. The defendant contends that Tabcorp is thus entitled to invoke the defence in relation to having approval in writing for the advertisements from TAB Limited. As for the newspaper ads, it is also contended that Tabcorp can invoke the section, because Tabcorp placed the ads in the newspaper, with the written approval of employees of TAB Limited.

[20]

Contention 1: Legal Advisers are employees of Tab Limited

It is trite to observe that this is somewhat of a convoluted proposition. Tabcorp contends that Mr Hornigold (from whom the court heard and whose statement is exhibited at 2) and the various lawyers on his team are correctly described as employees of TAB Limited, for the purposes of invoking the defence. This on the basis that although their employment contract, as tendered, describes their employer as Tabcorp Assets, a subsidiary of Tabcorp itself, the legal advisers advise and act for all the subsidiaries named within the corporate structure, including TAB Limited. Thus, Mr Lancaster invited the court to accept this proposition at T.61, 50: So while it can't be said that there was more than one employer because Tabcorp Assets is the employer, as stated, it can be said that the obligations and the exercise of each employee's obligations is something that the related parties have the benefit of and the employees act in their interests and the obligations under the employment contract can be enforced by those other entities in the corporate group. So while not formally the employer, it's the next best thing because you have TAB Limited and Tabcorp Holdings and the other companies in the group have the benefit of receipt of the obligations of these employees with this provision in their agreement. That includes all of the authors, Mr Hornigold and the other authors of the emails that we rely on as constituting the approval.
I am of the firm view that this proposition ought to be rejected. As per Mr Gray's submissions, there is nothing before me to indicate that TAB Limited has anything to do with the employment of the legal advisers, quite the reverse. Each of the legal team is employed by Tabcorp Assets (as per the contract and offer of employment at exhibit 2). They are not TAB Limited, and not employees of TAB Limited. It is but wishful thinking to suggest that TAB Limited can be seen as "the next best thing" to the employer and thus "fit in" to the definition under subclause 12(4).

[22]

Emails from legal advisers to various recipients constitute written approval for publication

Tabcorp submits that the email correspondence exhibited through Mr Hornigold between lawyers and the marketing department constitutes approval for publication. Of the advertisements or promotions for the purposes of subclause 12(4).
The court is asked to accept that Mr Hornigold and his legal team are in fact tasked with such approval, that their input represents the final step in the publication process. It is submitted that whilst the legal team do give legal advice as to content to employees in the marketing area, they do more than that - they are the "sign-off" and the last step in the process for publication.
Thus, rather than publication itself being a business decision taken elsewhere within Tabcorp, it is really the legal sign- off that is the final approval for publication. It is submitted that (at T. 63): It entirely makes sense for the lawyer cog to be the last stage in the process because a business would fall apart under the weight of its own inefficiency if the lawyers were giving advice on drafts that the marketers never intended to send out. In our submission, there is a strong inference available that when it gets to the lawyers the business has decided to publish, subject to what the lawyers would say. In that sense, when the lawyers give their approval and then when it's published in a form that reflects that approval, that shows that TAB Limited, in our respectful submission, has given approval in writing to the publication of the advertisements.
With respect, this is an inference and a construction that the court rejects entirely. Apart from piecing together these few emails, there is no solid evidence of a written approval for publication. It is unavoidable that is what the clause speaks to. The court is not privy to where it is these emails end up, and with whom. Are they somehow passed on via marketing to the publisher? How is that done? Is there a standard form? Who is the recipient in each case? These unanswered issues in my firm view point to the legal input being just that, legal advice given and taken (or not) as a step towards publication - not publication approval itself.
Moreover, the court is being asked to construct the legal input as written approval for publication. It is suggested that they somehow co-exist (at T.63, 30) as per Mr Lancaster's submissions: So when he says, "Nice work, all you have to do is change the permit number" or whatever, on the one hand or whenever he says, "This looks good, I've just got a couple of deletions," in each instance what he's doing has at least a dual character, in our submission. The approval in writing is constituted by his legal signoff. The fact that it is legal advice to Tabcorp Holdings is one thing but the fact that the lawyer doesn't have at the front of his mind cl 12 of the regulation is not to the point.
The court is at a loss to understand how to reconcile these propositions - whilst it is legal advice that is given, it is also allegedly approval for final publication in line with subclause 12(4). I find that the two cannot arise out of the one statement or suggestion in an email by the lawyer to the marketing department.
Mr Lancaster went on to suggest to the court that the author of the various emails containing legal advice need not appreciate what the role actually entails- apparently Mr Hornigold wasn't really aware of his dual role, as submitted: Mr Hornigold said that he didn't have clause 12 in mind for his part when he said what he said in respect of the ads he legalled. There does not need to be - there does not need to have been a subjective appreciation of the consequences of the legalling. In our respectful submission, the defendant is entitled to say, as appears from the natural inference and from the documents, that when he was saying, effectively, "This ad is good to go, subject to these minor matters being corrected," he was giving written approval on behalf of companies within the group to which he owed obligations for the publication of the advertisement.
It is trite to observe that if one is adopting responsibility for publication approval, one would be expected to have clearly defined and understood what that entails, given the consequences of breach.
I accept absolutely the contention of the prosecution that the email chain in evidence before me falls far short of written approval for publication under subclause 12(4). I find that those communications are, purely and simply, legal advice on aspects of the promotions. In accordance with Mr Gray's analysis, the content of the emails themselves revolve around changes and adaptations that speak to compliance with the regulations around gambling advertising. When the word "approval" appears in that advice, it is in my view inescapably approval in terms of being legally compliant.
The convoluted inferences that the court is being asked to make are in my view simply not reflective of the reality of the situation. I reject that such inferences are available. Subclause 12(4) is not made out as a defence.
Each of the offences is made out beyond a reasonable doubt. CANs A1 to A3 are proven beyond a reasonable doubt. Magistrate S McIntyre Downing Centre Local Court 16 December 2016

Office of Liquor Gaming and Racing v Tabcorp Holdings Limited

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (23 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (4)