Crown Casino wins against gambler

10 December 2009

In a recent high-profile case, the Victoria Supreme Court rejected the assertions by Mr Harry Kakavas that Crown Casino has exploited his self-described disability as a "pathological gambler".

Background

Mr Kakavas began gambling at Crown Casino in Melbourne when it opened in 1994. It soon emerged that the Gold Coast property developer had a gambling problem. In the following year, Mr Kakavas took out a self-exclusion order in which he banned himself from Crown. He spent four months in jail for fraud in 1998 and when released had the self-exclusion order revoked. Crown Casino, however, later banned him from entry after he was charged with armed robbery. This charge was later dismissed.

In 2005, Mr Kakavas was given permission to use the casino. He lost approximately $30 million playing high stakes baccarat between June 2005 and August 2006. He sued Crown Casino arguing that Crown was aware that he was a problem gambler and that it sought to take advantage of this special disability by offering various inducements to encourage him to gamble such as the use of Crown's private jet, complimentary accommodation and associated products and "loss rebate" payments of 20% on his gaming losses. Mr Kakavas sought relief in Equity rather than alleging a breach of duty of care or breach of statutory duty.

The decision

Justice David Harper found that the factual evidence did not support Mr Kakavas' claim that his pathological gambling addiction had prevented him from resisting Crown Casino's enticements. He stated that between June 2005 and mid-August 2006 Mr Kakavas never suggested to Crown that he was other than financially capable of maintaining his high roller status and keen to do so. Nor did he ever attempt to employ the self-exclusion mechanism.

Crown contended that it had no knowledge that Mr Kakavas was a pathological gambler and denied that it had engaged in any conspiracy to exploit him. It submitted that the inducements offered were in line with those offered to VIP high rollers by casinos worldwide. Crown also counter claimed against Mr Kakavas for $1 million of unpaid gambling debts due to a bounced cheque.

Justice Harper dismissed the claims of unconscionable conduct against Crown and upheld its counter claim.

While Mr Kakavas was unsuccessful, Justice Harper was critical of Crown Casino's claim that it promotes responsible gambling. It was revealed that Mr Kakavas had been banned from Star City Casino in Sydney by New South Wales Police and under Victorian gaming laws, people excluded from interstate casinos are also excluded in Victoria and any winnings they do make must be forfeited to the state.

The Court confirmed the precedent that, except in an extraordinary case, gambling losses are not recoverable and that, in the absence of a relevant legislative provision, there is no general duty upon a casino to protect gamblers from themselves. 

Impact of the decision

Operators of hotels, casinos and other providers of gaming and betting services will welcome this decision. It confirms the stance taken previously by Australian courts that gamblers must take personal responsibility for their actions and decisions.

For further information, please contact:

Curt Schatz | Partner
Mullins Lawyers
t +61 7 3224 0261
f +61 7 3224 0230
cschatz@mullinslaw.com.au