Class Action alleges cruise lines use ‘predatory behaviour’ to lure passengers into racking up casino debts

• Carter Capner Law is opening a class action against Carnival Corporation due to alleged predatory gambling practices.
• The law firm has reports of passengers who have racked up debts of up to $25,000.
• Cruise ship casinos can face different laws and regulations than casinos on land.

Earlier this year, Shane Dixon, a father of three, tragically jumped off Pacific Adventure after racking up immense gambling debt onboard. Carter Capner Law has now found other Australians who allege cruise ships incentivise racking up gambling debt while at sea, and is pursuing a class-action lawsuit against Carnival Corporation.

Peter Carter, a former national president of the Australian Lawyers Alliance, runs Carter Capner Law. Carter shared in a press release that other cruisers have come forward with similar stories, sharing how they felt that their cruise line exploited them for gambling debts.

One passenger said he had less than $2000 in his bank account while sailing, but P&O let him rack up a debt of nearly $6000. He claims he had no idea that this was a loan and hadn’t been keeping track of his losses. He maintains he thought the cruise line was debiting his bank account.

When he arrived back in Sydney he was forced to stay on board for three hours, to be interrogated about his gambling debt. Eventually, he was released after threatening to jump overboard and swim to shore. 

Another case shared by Carter involves a cruiser who was offered a cruise free with Carnival Cruise Lines and was given a credit limit of $5000 per day. Carnival Cruise Line allegedly already knew the passenger’s issues with debt and gambling, and he still had unpaid debts from previous cruises.

On this free cruise, he built a further $13,000 of debt, which totalled $25,000 when considering previous debts. He was made to sign an acknowledgment of the debt before being allowed to disembark. 

Carter believes that despite reactionary modifications after Dixon’s tragic death, more change needs to be made by cruise lines.

“Not only were these actions arguably unconscionable, but the practice of preventing passengers and their families from leaving the ship and interrogating them at the Australian port of disembarkation – even for short periods – about how and when the casino debt will be paid, is against the law.”

Lawyers explain the problems with cruise ship casinos

In an interview with ABC Radio, Carter explains that he believes cruise lines think they are free from any laws when sailing in international waters, but he doesn’t believe this to be the case. 

“Well, the point is that the cruise lines think that once they’re in international waters, everything goes, we have a different opinion and we think that there are still some regulations that need to be followed.

“Even the law of the United Kingdom or the law of Bermuda, wherever the ship is registered, will apply, and those laws are very favourable in terms of consumer protection.”

Due to a lack of regulation, cruise ships can allow those who are heavily intoxicated to continue gambling, or pursue other dangerous practices that they may not be able to do in other jurisdictions, such as Australia.

“Well, there are no regulations as such. The question is whether they should be permitted to allow gambling when people are heavily intoxicated, whether they should be given no questions asked loans just charged to their room account without any investigation. Is there the capacity to repay or any investigation as to whether they’re problem gambler?

“So those things we believe apply under the consumer protection laws of other countries. And the law that applies on the ship in international waters is the law of the state where the vessel is registered.”

Carter also mentions cases he’s come across where he believes incentives such as free drinks or free future cruises are used to lure passengers into racking up debts.

“Well, they go to the casino desk and they’ve asked, oh, would you like a loan? And they say, oh, how much? $5,000 a day, $2,000 a day, depending. We have people who’ve contacted us, who’ve racked up a debt of $13,000 without keeping track of it because the casino on the ship doesn’t do it for them and they’re distracted by the free drinks, the promises of the next cruise is free. So we think that’s all very poor conduct, and wouldn’t be tolerated in Australia.

“And our objective is to get compensation for those passengers who’ve been financially harmed as a result. And remember, it’s not just the passenger, it’s their family as well. So it’s serious conduct and they should be brought to account.”

The firm says the current action is focused against Carnival Corporation and its brands.

“Well, the main protagonist, according to the numbers who’ve already expressed their interest to us is Carnival and their brands, P&O and other Carnival cruises. Royal Caribbean featured to some extent. They’re the only two that are featuring at the moment and they’re the ones that operate out of Australia over the last six years.”

Law professor at Sydney Law School Tim Stephens explained to The Guardian how P&O cruise ship casinos can operate essentially free from regulation. 

Even though all P&O cruise ships sail under a British flag, a provision in UK law means none of this power extends to international waters. The UK Gambling Act states that the Gambling Commissions doesn’t have remit over a vessel’s gambling operations if they are taking place in international waters. 

While cruise lines such as P&O do have strict policies for gambling onboard, enforcing these regulations can present other complications.

Alex Russell, an associate professor in the experimental gambling research lab at Central Queensland University told The Guardian of the difficulties in enforcing gambling restrictions at the best of times, let alone at sea.

“We know that [intervention] usually doesn’t happen and it’s not necessarily a failing of the staff.

“It’s really hard to tell when someone is getting out of control. You don’t know how much someone has in their bank account, so it’s very hard for staff to step in.”

Carol Bennett, the chief executive of the Alliance for Gambling Reform also commented that the isolating nature of cruise ships should raise questions about regulations and enforcement.

“Questions need to be answered about these arrangements. Who’s taking responsibility and what does that look like? Who’s safeguarding the people who go on these cruises?”

What happened to Shane Dixon?

Shane Dixon, a father of three jumped overboard off his cruise allegedly after losing more than $9000 over two nights of cruising on the Pacific Adventure.

This incident raised questions of how why gambling practices and regulations differ from land to sea, and the potentially harmful nature of practices such as offering free drinks and free cruises to incentivise binge gambling. 

Another cruiser who was onboard the same ship spoke of what he perceived as damaging tactics to incentivise gambling on the cruise.

Under the name James, the cruiser commented: “We all got given free cruises to use in the next six months from the casino director and I myself racked up almost $2000 gambling which was charged to my credit card, something I would never normally do in a million years.”

Australia has a National Gambling Helpline that can be reached on 1800 858 858.