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In the first case of its kind, an Australian court has issued a A$5m ($3.4m) civil fine to a company in Queensland state that offered online poker services to Australian customers.
The Federal Court in Brisbane ruled on Monday (July 24) that Diverse Link, the operator of the poker website Redraw Poker, should suffer the fine despite there being “virtually no likelihood of recovery” of the penalty from the company or its owners.
Justice David Thomas’ ruling, which was primarily a justification of the size of the fine, followed his default judgment on May 23 in favour of online gambling regulator the Australian Communications and Media Authority (ACMA) against the company, which ignored the regulator and the court.
However, legal action against Diverse Link owner Rhys Edward Jones, Redraw Poker promoter Brenton Lee Buttigieg and a second company Brisbane Poker is ongoing, the ACMA said in an undated statement this week.
The ACMA had alleged that the companies and individual defendants breached Section 15(2A) of the Interactive Gambling Act 2001 by offering, promoting and providing referrals for the poker website to Australia-based customers.
Provision of services began under Jones in March 2020 and continued under Diverse Link’s umbrella from March 2021 until April 2022, the ACMA said.
“This particular contravention extended over a 12-month period,” the court ruled on Monday. “The contravention was clearly deliberate. Diverse Link has not co-operated with the ACMA or demonstrated any remorse for its conduct.”
The “sophisticated” and “well organised” operation was also notable for allowing bitcoin in remittances, it said.
Based on ACMA submissions by independent experts, the court estimated that the operation received around A$4.2m in deposits in the contravening period, but a lack of bitcoin data indicated that the true amount was likely larger.
Justice Thomas wrote that recovery of any money would be unlikely given that Diverse Link began the process of deregistration when the ACMA launched legal action.
But he said deterrence considerations required that A$800,000 be added to the sum of the illegal deposits in calculating the fine.
The ACMA had requested a fine of A$5m in its court filings, and it “welcomed” the latest ruling in this week’s statement.
“The judgment marks the first time the Federal Court has ordered a civil penalty in relation to contraventions of the [Interactive Gambling Act],” it said.
“As the proceedings against the three remaining respondents are ongoing, the ACMA will not be providing any further comment at this time.”
The court noted in a lengthy discussion on penalty assessment that the gaming law’s provisions allowed for accrual of a daily fine of more than A$8.3m for companies and more than A$1.6m for individuals, meaning that Diverse Link was liable for a maximum fine of nearly A$3.3bn.
Justice Thomas ruled out such a large fine, adding that a A$5m fine was sufficient for deterrence, and that in any case parity for the penalty could not apply because of the groundbreaking nature of the case.
