Facts: Harry Kakavas (HK), a wealthy Gold Coast businessman, was a recreational gambler who frequented various casinos. In 2004 the executives of Crown Melbourne invited HK to return to their casino, having excluded him in 1998 because of certain charges involving HK that were being investigated. At Crown's request, HK provided psychological reports that stated that he was able to properly regulate his gambling behaviour. HK also negotiated with Crown to obtain favourable terms as a 'high roller' including the use of Crown's private jet, free accommodation and free food and drink. Between June 2005 and August 2006, HK lost over $20,000,000 to Crown. He sued to recover these losses on the basis that, while gambling, he was subject to a pathological urge that made him unable to make worthwhile decisions in his own best interests, that Crown was aware of this, and took unconscionable advantage of his situation by allowing him to gamble.
Issue: Had Crown engaged in unconscionable conduct under the provisions of the general law that underpin s 51 AA of the Trade Practices Act 1974 (Cth) (now s 20 (1) of the Australian Consumer Law (ACL))?
Decision: Taking account of the overall facts of the case, Crown had not engaged in unconscionable conduct by allowing HK to gamble and accumulate substantial losses.
Reason: In deciding whether there has been unconscionable conduct, account must be taken of the whole course of dealing between the parties. In the present case, HK had decided to attend Crown on many occasions over many months. When so deciding, he was not affected by any pathological addiction. Further, both HK and Crown were fully aware of the possibility that losses might be the result of gambling. HK was a 'high roller' who bet significant sums and who at times won significant amounts, even though in the end he lost more than he won. The court found that 'high rollers' typically have a heightened interest in gambling and are willing to risk substantial losses. HK appeared to have the resources to gamble to the extent he did and did not complain of financial difficulty. He was able to stay away altogether from Crown when he chose to do so. Crown had gone to reasonable lengths to determine that HK had no psychological gambling problems. HK's behaviour was confident and charming. In these circumstances, HK was not suffering from any special disability which was apparent to Crown and of which they took unconscionable advantage. The gambling losses were not recoverable by HK.