The Biggest Loser

Harry Kakavas was one of Australia’s top real-estate salesmen. He made a fortune selling houses on the Gold Coast. He was also one of Australia’s biggest gamblers. In 14 months from June 2005 Kakavas slapped down almost $1.5 billion on the baccarat tables at Crown Casino in Melbourne – betting $300,000 a hand – and lost more than $30 million. It was everything he had and more – much more. Now he owes millions of dollars to his lawyers, millions of dollars to his banks, and millions of dollars to his friends who believed they were funding his successful real-estate ventures.

To lure the high roller away from Las Vegas, where he was already losing millions – and to lock him into Crown – James Packer’s casino offered Kakavas free luxury accommodation, free food and drink, free limo travel and a private jet to ferry him from his home on the Gold Coast. It even flew him to the Philippines and back for a holiday. On several occasions Crown also gave him up to $50,000 in cash as ‘lucky money’, delivered in a cardboard box as he boarded the plane. The total value of these inducements came to almost $10 million, and they worked a treat.

Kakavas lost heavily – in one instance $2.3 million in 28 minutes – and continued to lose until his money was gone. Now he has lost again. In December, his multimillion-dollar damages claim against Crown was thrown out by the Victorian Supreme Court with a clear message to other gambling addicts that Australian courts are not going to give them their money back – ever.

Kakavas sued on the basis that Crown knew he was a compulsive gambler and set out to exploit his weakness. In doing so, he claimed, the casino had acted unconscionably. Kakavas’ lawyers believed that Crown had behaved so badly by luring him back to its tables that the court would be prepared to make legal history. Instead, Justice David Harper ruled that the law neither does nor should allow gamblers to recoup their losses. Unless that judgement is overturned or the law is changed, casinos and clubs will remain free to do exactly what they like and get away with it, at least where problem gamblers are concerned.

Kakavas was both surprised and devastated by the verdict. Normally brash, confident and loquacious, he was stunned into silence. His legal team, led by one of the nation’s top QCs, Allan Myers, was equally shocked, believing that Kakavas had an excellent case and that the hearings had gone well. It is believed they even took the case on tick because they were sure of victory. And Crown also appears to have been worried about the outcome. In the weeks before the verdict was handed down, the casino sent its corporate counsel, Guy Jalland, to Melbourne to offer a settlement. James Packer, Crown’s biggest shareholder, was understood to be keen to deal. It seems, however, he changed his mind, which turns out to have been a good call.

Kakavas is, perhaps, not the most sympathetic victim. He can be volatile, angry and even scary when he loses his rag. I’ve talked to him countless times in the last 18 months and on three or four occasions he’s been quite unhinged. With his white tie and chalk-striped suits, he also looks like a gangster. In 1998 he spent four months in jail for defrauding Esanda Finance Corporation of $286,000. That same year he faced charges of armed robbery, which were tossed out at the committal stage because of insufficient evidence. Yet Kakavas is also charming and clever and his army of loyal friends sat in court, for support, throughout his recent trial.

The Esanda fraud is a landmark in the Kakavas story because he claims to have committed the crime in 1994 to feed his gambling habit and because he quickly lost most of the money at Crown Casino. The fraud also led Kakavas to admit he had a gambling problem and to get himself banned from the casino.

 Just as importantly, it brought Kakavas’ activities to the attention of one of Crown’s executives, Bill Horman, a former deputy commissioner of Victoria Police. It was Horman who recommended Kakavas exclude himself from Crown, Horman who referred Kakavas to Crown’s psychologists for treatment of his gambling problem and Horman who gave a statement during Kakavas’ trial in 1998 acknowledging all this. It was also Horman, six years later, who was central to the decision to invite Kakavas back to Crown to gamble.

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