Australia: Supreme Court setting for gambling stoush

The civil trial between the State of Victoria and the former holders of gaming machine licences in the state, Tabcorp Holdings Ltd (Tabcorp) and Tatts Group Ltd (Tatts), has commenced in the Victorian Supreme Court before Justice Hargrave. Until the expiry of their licences in August 2012, the two companies held a duopoly over Victoria’s 27, 500 gaming machines located outside of Melbourne’s Crown Casino. Following the expiry of the licences, the entitlement to operate gaming machines was allocated to club and hotel venue operators.

The Tabcorp action arises under the now repealed Gaming and Betting Act 1994 (Vic) (1994 Act) which entitled Tabcorp to receive a payment upon the granting of new licences (other than the initial licences which Tabcorp and Tatts held).

The Tatts action arises under contract law. It entered into an agreement with the Victorian Government on 17 November 1995 which created a similar entitlement to payment.

Combined, the companies are suing the Victorian Government for over AU$ 1 billion.

The Victorian Government is arguing that the 1994 Act is unenforceable as it has been repealed and replaced by new legislation and also that the new “entitlement” of the clubs and hotels is materially different from the licences previously held by Tabcorp and Tatts, and that the obligations to make payments therefore do not arise.

We will continue to monitor this matter as it progresses through the Victorian courts.

Co-authored by Judith Miller, Partner and Jaimie Wolbers, Solicitor