It looks like the class action bandwagon leader Maurice Blackburn will shortly be launching a long-threatened court case claiming that the manufacturers and providers of poker machines have broken the law and are liable for the punters’ losses. The first targets are Aristocrat and Crown Casino. If Maurice Blackburn is right, floodgates. Australians misplaced $11.6 billion of their money in pokies in 2014-15, and that figure is rising. If it turns out their losses are somebody else’s fault … well …
Before we wet our legal pants with excitement, let’s have a look at the case. Nothing’s been filed yet, but Maurice Blackburn has been laying down hints since last year about the legal basis of its claim.
Class actions generally come in one of two forms: negligence or deception. Negligence cases, such as those over medical devices gone bad, chemical spills or gas explosions, assert that whoever caused the harm owed the victims a duty of care and failed in that duty. It’s generally accepted that that won’t fly in a gambling losses case, because poker machines do exactly what their makers design them to do: take your money and give a bit of it back to someone else. Gamblers voluntarily assume the risk (or, if you like, the statistical near-certainty) that they won’t come out a winner. Sitting at a pokie is a lawful activity, all of the risks of which are well known, publicised and accepted. If you lose, yeah, that’s actually the idea.
The pokies case is going to be one of the other category, frequently seen in consumer product cases (the current VW class action, for example) and shareholder claims (the inevitable and wildly ironic case against the directors of the other class action law firm giant, Slater & Gordon): a claim that pokie players are being lied to.
This case will be filed under the Australian Consumer Law and its famously brief prohibition on corporations from engaging in misleading or deceptive conduct. Relevantly, the assertion will be that the machines are designed to deceive consumers into believing that their chances of winning are much higher than the reality. This, it will be said, is achieved by a combination of deviously clever techniques that play on the user’s emotions to hook them in and keep them seated until they’ve been bled dry.
In terms of detail, what’s been said so far is that university researchers have broken down all the design features of a poker machine called Dolphin Treasure. They’ve allegedly identified that there is an uneven spread of symbols across the five “reels” in the game, so that winning is harder than the machine represents.
Another complaint is that the sounds and lights the machine produces are designed to make the player think they’ve won when they’re actually suffering losses. Neuroscience will be called in to argue that this process, repeated over time, gives players a drug-like “hit” that keeps them at a high level of excitement and anticipation of further wins, causing them (I guess) to irrationally believe that they’re always on the cusp of a major comeback.
Fair enough. When you consider that there are about 200,000 poker machines in Australia (20% of the world’s total), one for every 108 of us, and that they don’t do anything but sit in unpleasant rooms whirring and flashing in symbiosis with the ATMs at the other end of those rooms, it’s not a stretch to conclude that an irrational but powerful process is in play.
Add the fact that the people who lose the most money to poker machines are generally speaking those least able to bear the losses, and I think it’s fair to say that poker machine players are acting on impulses they didn’t design themselves.
I’m not arguing the social utility case here. What does the law say?
It’s an interesting proposition, legally speaking. Misleading or deceptive conduct cases do not require proof of intention, nor does there have to be any relationship between deceiver and victim. The essential elements are that the company in question says or does something misleading; the victim, relying on that misleading act and unaware of the truth, makes a choice based on the lie and suffers loss or damage as a result.
In the pokies context, this will mean establishing that Aristocrat has designed its machine in such a way that it actually communicates misrepresentations to the player. Presumably, this will be described as a combination of the settings, lights, sounds and words the machine generates as the play proceeds, right from when the player sits down and pulls out their first gold coin. Maurice Blackburn will have to prove that this colour and light show conveys actual untruths, that it creates understandings in the player’s mind as to their chances of winning and whether they are in fact winning that are false or at least materially exaggerated.
Assuming that hurdle can be jumped, the hard part remains. Let’s say the machine does stretch the truth too far, by shouting “Win!” every time you lose. You’ll still have to prove that you didn’t know you were being led up the garden path and that, had you known the truth, you’d have walked away.
I think that’ll be quite tough. The science around gambling certainly establishes how easily addictive it is, and poker machines, like all gambling attractions, are designed specifically to exploit that. But it’s also universally known that the house always wins. Logic and facts dictate with no shadow of doubt that gambling is proof of the triumph of hope over experience as an essentially human characteristic, but good luck to anyone trying to convince a judge that they thought they were a chance of actually winning.
The problem as I see it is that gambling is, in the first instance, a choice consciously made — a choice to spend money on an activity that is designed to, and with almost absolute certainty will, leave you out of pocket. If the machine you select for that process of wealth redistribution uses psychological techniques to hold you in place for longer and drain you faster and deeper than would otherwise have most likely happened anyway, how will you prove that it’s left you worse off?
If this case runs, one thing is for sure: the plaintiff punters are going to be in for a deeply unpleasant experience in the witness box, entirely likely to revisit their trauma upon them in spades. I get that the real game here is to deal a serious blow to the poker machine industry and make the governments that live off the proceeds take the social cost of problem gambling seriously. Unfortunately, this particular tactical path will do no favours to some of society’s least fortunate members. Even a win isn’t going to deliver a significant payout.
I’d want much better odds for this gamble than it seems to me are on offer. Pass.