Supreme Court’s discovery go-ahead in Tabcorp, Entain case

The NSW Supreme Court has granted Tabcorp’s request for certain documents as it decides whether it will proceed with legal proceedings looking into the legality of Entain Australia and AHA NSW’s digital wagering partnership.

In October last year, Entain and AHA NSW announced a new digital wagering agreement, that would advertise Entain’s wagering app brands Ladbroke’s and Ned’s within participating venues. Both Entain and AHA NSW stated that the new agreement would not contravene TAB’s exclusive retail license in New South Wales. In December, Entain announced that it had entered into its first venue partnership with Momento Hospitality, to feature a ‘Ladbrokes Lounge’ within its new pub, Hudson Hotel.

While this was all occurring, Tabcorp confirmed that it had begun preliminary discovery proceedings to look into the legality of Entain and AHA NSW’s agreement. Judge Stevenson yesterday ruled that Tabcorp is entitled to three of the eight categories of documents they requested to decide whether it will proceed with its case. Documents to be provided are:

1. All documents constituting, recording or evidencing legal advice that Entain received with respect to the lawfulness of the Entain partnership or the arrangements with NSW venues contemplated by it.
2. All documents or other materials setting out the details as to how the “Ladbrokes Lounges”, “VIP Ladbrokes Activation Zones” or “Neds Club Lounges” or any other Entain location or area will or may be configured and operate in connection with the arrangements contemplated by the Entain partnership, including:

a)   details of proposed (or options for) physical layout, infrastructure and features, including presence and/or use of any devices;

b)   incentives or benefits proposed to be offered, through the QR code “pathways to our offers, markets and other customer activations” or otherwise, to customers or venues; and

c)   the proposed features that will or may be available through “Mates Zones”, “Quaddie Quarter” or “VIP Ladbrokes Activation Zones” or any other Entain location or area, including those already mentioned.

• All documents or other materials setting out the details as to how the “Ladbrokes Lounges”, “VIP Ladbrokes Activation Zones” or “Neds Club Lounges” or any other Entain location or area will or may be configured and operate in connection with the arrangements contemplated by the Entain partnership, including:

a)   details of proposed (or options for) physical layout, infrastructure and features, including presence and/or use of any devices;

b)   incentives or benefits proposed to be offered, through the QR code “pathways to our offers, markets and other customer activations” or otherwise, to customers or venues; and

c)   the proposed features that will or may be available through “Mates Zones”, “Quaddie Quarter” or “VIP Ladbrokes Activation Zones” or any other Entain location or area, including those already mentioned.

In a statement, Tabcorp welcomed Judge Stevenson’s decision to grant preliminary discovery.

“Tabcorp is concerned the arrangement between Entain and AHA NSW, depending on all the facts, raises a risk that Entain and/or AHA NSW may engage in illegal activity under the Unlawful Gambling Act 1998 (NSW).

 “The Court accepted that whether the proposed arrangements will result in a breach of the Unlawful Gambling Act may well depend on the detail of those arrangements.

“Tabcorp will review the documents disclosed in order to assess whether or not to commence legal proceedings against Entain or AHA NSW, or both, in the Supreme Court.”

Under the Totalizator Act 1997 (NSW), Tabcorp has an exclusive retail license until 2033. In written and oral submissions, Tabcorp emphasised the potential loss it might suffer were the Entain/AHA proposal to proceed.

Tabcorp’s chief legal and risk officer, John Fitzgerald, gave the following evidence in regards to Tabcorp’s turnover.

“Tabcorp’s business operations within NSW retail venues is significant. Tabcorp’s total retail turnover nationally in the 2022 financial year was around $4 billion across 4,000 venues, with hotels representing 2,500 of these venues, with 43% of hotels being located in NSW.

“Within NSW, hotels contribute around 56% of Tabcorp’s total retail turnover and around 60% of Tabcorp’s digital in venue turnover. Tabcorp pays around $25 million annually to NSW hotels by way of commissions. Tabcorp has significantly invested, and continues to invest in these venues through capital contributions and dedicated teams of employees.”

An Entain spokesperson made the following statement in regards to Judge Stevenson’s ruling:

“Entain acknowledges the Supreme Court judgment granting preliminary discovery of documents on three of eight requested categories.

“Entain is building great momentum in the roll out of its digital wagering sponsorships and is pleased with the high levels of interest from pubs across NSW. More broadly, our newly created Entain Venues business is working with venues nationally to help drive engagement and foot traffic across the week.”

AHA NSW declined to comment.