Customer keeps £1 million despite error: A timely reminder to WSPs to review their terms and conditions
The recent United Kingdom case of Durber v PPB Entertainment Limited [2025] EWHC 498 (Paddy Power Case) is of broader interest to Australian and other international wagering service providers (WSPs) and gaming providers and serves as a timely prompt to undertake a review of their terms and conditions. What can Australian WSPs learn from the Paddy Power Case and how can similar kinds of risk and litigation be avoided?
A recap – Regulator guidance on terms and conditions in Australia
Although specific requirements for terms and conditions may apply based on the jurisdiction in which an Australian WSP is licensed, as a general principle, terms and conditions must not be “unfair” and are required to be clear, easy to understand and compliant with relevant laws.
There has been a particular focus on terms and conditions by regulators in recent times. For example, the Northern Territory Racing and Wagering Commission (NTRWC) recently issued the Guideline – Terms and Conditions of Wagering No. 2/2024 (Terms Guideline), under the Racing and Wagering Act 2024 (NT). In the Terms Guideline, the NTRWC provides specific detail to Northern Territory-licensed WSPs when drafting and updating their wagering terms and conditions. While it is unlikely that the requirements would surprise, the Terms Guideline provides for a more uniform approach across Northern Territory licensees and ensures that a prescribed range of issues are addressed and presented to consumers. Importantly, the Terms Guideline references multi-brand WSP who operate more than one brand under a single licence and states that it is “crucial” that customers know which WSP they are engaging with.
It is also worth noting that in Victoria, the licensing body Racing Victoria can request that Victorian licensed WSPs have their terms and conditions reviewed by an independent law firm.
What happened in the Paddy Power Case?
The case involved a customer of the UK based gaming operator, Paddy Power, who sought to recover over £1,000,000 of jackpot winnings. The customer played an electronic gaming machine (EBT) game called “Wild Hatter” (Game). The Game has two stages: the first being a game reel matching items, and the second, a wheel of fortune style element. To win a prize the player had to be successful in both elements. In the Paddy Power Case, the customer won at the first round of the Game and proceeded to the second. The rules of the Game stated “Spin the jackpot wheel to determine which of the offered jackpot tiers will be won”. Clicking on “spin” the Game indicated the customer had won the “Monster Jackpot” worth a significant £1,097,132.71!
However, six weeks prior to the customer playing the Game, the operator of the Game, Red Tiger Gaming, who supplied and hosted the Game for Paddy Power, had amended the Game’s animations and had incorrectly mapped the jackpot identification codes to the wrong animation symbols for the jackpots. This meant that the “Monster Jackpot” and the “Daily Jackpots” animations were swapped. The software random number generator (RNG) used for the Game had the customer instead winning the “Daily Jackpot” which was worth a much smaller amount of £20,265.14.
Paddy Power sought to rely on its standard terms and conditions to award the customer the Daily Jackpot amount as opposed to the higher amount:
“You fully accept and agree that random number generator (RNG) software will determine all outcomes of Games on the Games Website. In the event of a discrepancy between the results displayed on your computer and a Game's records on our server, our records shall be regarded as definitive.” [Referred to as Clause B1]
“In the event of systems or communications errors relating to the generation of any result, bet settlement or any other element of a Game, we will not be liable to you as a result of any such errors and we reserve the right to void all related bets and plays on the Game in question." [Referred to as Clause B2]
The Court’s decision
Relevantly, the presiding judge, finding in favour of the customer, determined that:
Construction of the Game rules: The Game rules (as displayed on the EBT) applied and set out that it was the jackpot wheel as shown to the customer that determined what she had won, not the RNG.
Priority when rules conflict: The Game rules took precedence over the standard terms and conditions as a result of the preamble of the standard terms and conditions which stated that, in the event of an inconsistency, the Game rules would prevail. The Game rules stated the customer had won the Monster Jackpot.
Human Error and Clause B2: Even if Clause B2 did have priority over the Game rules, the reference to “systems or communications errors” in Clause B2 did not cover human errors which was the cause of the error in this Game.
The judge went on to find that there were contractual limitations with the standard terms and conditions because they were unusual and onerous as well as being too broad and unfair based on the relevant UK law.
Lessons for WSPs
The Paddy Power Case does not directly impact Australian law. However, UK law often serves as a guide for future decision making and policy positions in Australia and decisions of the UK courts can be influential locally in many circumstances. This case, along with the Terms Guideline, serve as a reminder to WSPs to holistically consider their terms and conditions and to do so regularly to avoid unintended consequences.
Some key takeaways of the Paddy Power Case for Australian WSPs include:
Make sure references between separate terms are consistent with each other. As we saw in the Paddy Power Case, the Game rules contradicted the standard terms and conditions.
Considering the categories of “error” which may arise, noting the important distinction in the Paddy Power Case of human errors on the one hand and “system” or “communication” errors on the other. Drafting should reflect a considered approach that accommodates the breadth of issues that may arise in the provision of their services and the consequences for the user if they do.
In line with the Terms Guideline, where terms are onerous or unusual, they must be particularly clear and written in simple language and be easily locatable by the customer. Terms must also be brought to customers’ attention, for example, by being expressly accepted when opening an account.
In Australia, it is common for WSPs to have standard terms and conditions, betting rules (often separated for racing and sports), promotional terms as well as responsible gambling and privacy policies. The judge in the Paddy Power case was critical of the “complicated web of multiple documents” and noted that the written contract terms “consisted of multiple differently located documents which made it difficult for consumers to see the whole contract in one place at one time”. Australian WSPs should consider whether it is making too onerous on the customer to find the appropriate or relevant rule and how it may be able to assist customers.
Ensuring that the terms and conditions relied upon are not ‘unfair’ and otherwise comply with the Australian Consumer Law. Hefty penalties can apply. Recently amended legislation now provides that for businesses, the maximum financial penalty is the greater of $50 million, three times the value derived from the relevant breach, or, if the value derived from the breach cannot be determined, 30 per cent of the WSP’s turnover during the period it engaged in the conduct.
Need guidance? We are here to help.
If you need assistance with the review or updating of your terms and conditions or would like to discuss any of the above, please contact any member of the Senet team.