Pathological Gambling and Civil Actions for Unconscionability: Lessons from the Kakavas Litigation

Abstract

The Productivity Commission's 2010 report confirmed that gambling is a fundamental aspect of contemporary Australian culture. This is likely to become even more entrenched with the increasingly prominent association between gambling and professional sport. In addition, since the liberalisation of gambling in Australia during the 1990s, governments have become heavily dependent upon gambling revenue. The role of the law as a regulator of the excesses of gambling is complex, both in respect of criminal matters and recourse sought by gamblers against gambling houses where they have lost significant sums of money. The decision of the High Court in Kakavas v Crown Melbourne Limited [2013] HCA 25 confines the potential for gamblers to sue casinos and bookmakers in equity for unconscionably exploiting their vulnerabilities. However, it leaves open a door for such actions to be brought by some categories of persons whose inability to exercise rational judgment in respect of their DSM-5 gambling disorder, or some other form of vulnerability, can be proved to have been known by casinos and bookmakers. This will be relatively rare but such actions remain feasible.

Key words:

• gambling disorder
• pathological gambling
• unconscionability
• legal redress
• DSM-IV
• DSM-5
• addictions
• sentencing

Notes

1. Productivity Commission, Gambling Inquiry Report (26 February 2010) <http://www.pc.gov.au/__data/assets/pdf_file/0010/95680/gambling-report-volume1.pdf> accessed 13 June 2013.

2. ibid 6.

3. ‘Sky City Deal Unveiled’ New Zealand Herald (13 May 2013).

4. IN Rose, Gambling and the Law (Gambling Times Inc 1986). See eg National Gambling Reform Act 2012 (Cth).

5. See United States v Torniero, 570 F Supp 72 (D Conn 1983); 735 F 2d 725 (2d Cir 1984); State v Lafferty, 189 Conn 360, 456 A 2d 272 (1983); United States v Carmel, 801 F 2d 997 (7th Cir 1986); United States v Gillis, 773 F 2d 549 (4th Cir, 1985).

6. S Rachlin, AL Halpern and SL Portnow, ‘Pathological Gambling and Criminal Responsibility’ (1986) 31 Journal of Forensic Sciences 235.

7. A Blaszczynski and D Silove, ‘Pathological Gambling: Forensic Issues’ (1996) 30 Australian and New Zealand Journal of Psychiatry 358.

8. See also DN Crockford and N el-Guebaly, ‘Psychiatric Comorbidity in Pathological Gambling: A Critical Review’ (1998) 43 Canadian Journal of Psychiatry 43.

9. See generally Novak v The Queen (`1993) 69 A Crim R 145 at 159; R v Do [2007] VSCA 308.

10. See eg R v Telford [2004] SASC 248.

11. [2009] VSCA 67 at [56].

12. (1995) 79 A Crim R 510 at 511.

13. At 512.

14. [1999] NSWCCA 111; (1999) 46 NSWLR 346 at [202]–[203].

15. See also Anna Le v The Queen [2006] NSWCCA 136 at [32] per Latham J (McColl JA agreeing).

16. [2006] NSWCCA 257 at [27].

17. [1999] NSWCCA 111; (1999) 46 NSWLR 346 at [273].

18. These principles were also applied in Ourdi v The Queen [2009] NSWCCA 46.

19. R Goodman, The Luck Business: The Devastating Consequences and Broken Promises of America's Gambling Explosion (Free Press 1995).

20. See also RA Volberg, When the Chips are Down: Problem Gambling in America (The Century Foundation Press 2001).

21. MJ Aasved, The Sociology of Gambling (Charles C Thomas 2003); MJ Aasved, The Biology of Gambling (Charles C Thomas 2003).

22. B Castellani, Pathological Gambling: The Making of a Medical Problem (SUNY Press 2000).

23. See P Ferentzy and E Turner, A History of Problem Gambling: Temperance, Substance Abuse, Medicine and Metaphors (Springer 2013); DC Hodgins, JN Stea and JE Grant, ‘Gambling Disorders’ (26 November 2011) 378 The Lancet 1874.

24. See eg H Humphrey, This Must be Hell: A Look at Pathological Gambling (iUniverse 2009).

25. IN Rose, ‘Compulsive Gambling and the Law’ (1988) 4 Journal of Gambling Behavior 240.

26. See eg NM Petry, Pathological Gambling: Etiology, Comorbidity and Treatment (American Psychological Association 2012); CA Adamec and FO Olive, Pathological Gambling (Chelsea House 2010); JP Whelan, AW Meyers and TA Steenbergh, Problem and Pathological Gambling (Hogrefe 2007).

27. DSM-V 586.

28. DSM-V 586.

29. As against in the ‘Impulse-Control Disorders Not Elsewhere Classified’ in DSM-IV.

30. As against a requirement for five such behaviours in DSM-IV.

31. ‘Has committed illegal acts such as forgery, fraud, theft, or embezzlement to finance gambling’: DSM-IV 618.

32. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462.

33. ibid.

34. At [18].

35. At [20].

36. At [21].

37. At [23].

38. Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234; (2001) 53 NSWLR 43 at [48].

39. At [25].

40. At [26].

41. At [26].

42. At [28].

43. At [28].

44. See JC Hallam, ‘Rolling the Dice: Should Intoxicated Gamblers Recover their Losses?’ (1990) 85 Northwestern University Law Review 240.

45. At [73].

46. At [88].

47. At [108].

48. At [124].

49. Kakavas v Crown Melbourne Limited [2009] VSC 559 at [442].

50. At [12].

51. At [143].

52. At [146].

53. At [156].

54. At [160].

55. At [161].