Following an ACCC investigation, gaming services provider Maxgaming Qld Pty Ltd (Maxgaming), a wholly-owned subsidiary of Tabcorp Holdings, has provided a court-enforceable undertaking to amend potentially unfair contract terms.
The terms were contained in Maxgaming's standard form contacts with small business gaming venues. They included terms which rolled over the contract without notice to the customer, allowed Maxgaming to increase the fees payable if equipment required upgrading without the customer's consent, and excluded Maxgaming from liability for negligent or wilful acts.
"We are pleased that Maxgaming has acknowledged that certain terms in its standard form contracts with gaming venues may have been unfair under Australian Consumer Law (ACL). We were concerned because we believed these contract terms benefited the company without providing corresponding benefit to their customers," ACCC Commissioner Liza Carver said.
Maxgaming has since written to its small business customers to amend those terms and has undertaken not to include those terms or similar terms in future small business contracts.
Under the new contract terms, customers are informed before the contract rolls over, and when it does, the subsequent term is for a shorter period of one year. Previously, the subsequent term locked customers into their contracts for long periods of time, in some cases up to six years.
"While the undertaking only applies to Maxgaming's contracts with small businesses, we are pleased that Maxgaming has offered to amend those contract terms for larger businesses," Ms Carver said.
In the undertaking to the ACCC, Maxgaming has also committed to inform all existing customers of the undertaking, and to introduce a rigorous compliance program including staff training and an independent review.
"This is a reminder to all businesses, not just in the gaming industry, of their obligations under the ACL and the importance of ensuring their contracts do not contain unfair contract terms," Ms Carver said.
A copy of the undertaking is available on the public register at Maxgaming Qld Pty Ltd.
Background
Tabcorp Holdings (ASX:TAH) is Australia's largest gambling company.
Maxgaming is the largest supplier of monitoring, gaming and maintenance services in Queensland, servicing hundreds of licensed gaming venues including sports clubs, pubs and casinos.
Maxgaming provides and maintains gaming systems which run electronic gaming machines in gaming venues. It also provides monitoring services to ensure that relevant information is collected and provided to the relevant state or territory government, and that electronic gaming machines comply with legislative requirements.
Note
Under the Australian Consumer Law, businesses are not prohibited from including or relying on an unfair contract term against consumers or small businesses.
Although a court can declare a contractual term to be unfair and therefore void and unenforceable, currently penalties cannot be imposed on companies using unfair contract terms.
The ACCC continues to advocate for a change to the ACL to make it illegal for businesses to include or rely on an unfair contract term against consumers or small businesses, and for the courts to have the power to impose penalties where businesses use and benefit from unfair contract terms.
In February 2022, the then Government introduced legislation into parliament which includes reforms to enhance the protections against unfair contract terms in the ACL, including the introduction of civil penalties.
