The court also upheld the enforceability of interest on late casino payments
The High Court ruled that converted loyalty points count as gambling revenue and upheld interest enforcement on late payments, reinforcing the legislative authority over casino operations.
The dispute between SkyCity Adelaide Pty Ltd and the State of South Australia concerned casino duties and late payment interest. The case revolved around the interpretation of provisions in the Casino Duty Agreement (CDA) under the Casino Act 1997 (SA). SkyCity challenged the obligation to include converted loyalty points in its gross gambling revenue, while the state contested the relief granted against the enforcement of late payment interest.
SkyCity's appeal questioned the conclusion of the South Australian Court of Appeal, which found that loyalty points converted into electronic gaming credits were an “amount received” by SkyCity “for or in respect of consideration for gambling” as per the CDA. SkyCity argued that these converted credits, when used for gambling, do not constitute actual revenue, as they do not bring in additional funds to the casino. They claimed that using these credits was equivalent to offering a free bet and should not be counted as gambling revenue.
However, the High Court dismissed this argument. It agreed with the Court of Appeal’s interpretation, holding that the converted credits, being redeemable for cash and used in betting, had monetary value. The court reasoned that the monetary value associated with these credits counts as an amount received regarding consideration for gambling, making it part of SkyCity’s gross gambling revenue.
On the cross-appeal, the state contested the Court of Appeal’s view that SkyCity’s obligation to pay interest on late payments of casino duties under the CDA could be relieved if it was deemed a penalty. The High Court overturned this finding, ruling that the CDA’s provisions on interest were enforceable regardless of whether the interest rate could be considered penal at common law or in equity. The court explained that the Casino Act explicitly allows for agreements between the treasurer and casino operators on interest rates for late payments, and these agreements do not fall under the common law's principles on penalties.
Ultimately, the High Court dismissed SkyCity's appeal and granted the state’s cross-appeal, ordering SkyCity to cover the state's legal costs. The ruling clarified the scope of obligations under the CDA and affirmed the legislative framework's authority over the casino's operations and financial duties.
