Betfair takes on NSW in legal battle to determine future of Oz racing 18/11/2009

Stephen Carter

A TEST CASE THAT COULD SHAPE both the future of horse race wagering and racing funding in Australia got underway in the Federal Court of Australia in Sydney today.

The case follows Betfair Australia having issued proceedings in Australia's most populous state, New South Wales (NSW), against two racing bodies, Racing NSW and Harness Racing NSW, in October last year.  The challenge claims that the 1.5% product fee imposed on the turnover of wagering operators wishing to cover racing in the state, which contains the city of Sydney, is anti-competitive and discriminates in favour of Tabcorp, operator of the NSW TAB.

Tasmania-licensed Betfair argues that because this equates to around 60% of its gross revenue when levied on its exchange model in the state, compared to less than 10% of the TAB’s, the fee makes it impossible for it to compete and breaches the Australian Constitution by imposing protectionist barriers on trade between states.

Betfair’s call for racing product fees to be levied on gross profit rather than turnover has already been accepted in the state of Victoria, where operators pay 10% of gross profit to the racing industry.
 
Key support for Betfair came in October from the government’s main independent advisory body, the Productivity Commission, whose published report recommended the introduction of a national betting model based on gross profit, arguing that “the future health of racing and wagering is dependent on a funding model that can accommodate lower margin operators.” 
  
This is the third legal challenge to Australian state betting laws Betfair has brought under Section 92 of the Australian constitution, which forbids barriers to inter-state trade, including winning a March 2008  Australian High Court challenge against Western Australian rules banning residents from using a betting exchange.
 
Betfair’s joint challenge with Sportingbet to NSW laws preventing interstate-licensed wagering companies from advertising in the state also proved successful when restrictions were relaxed in October 2008 ahead of the case being heard.

Betfair has been shortlisted for awards including Operator of the Year and UK Sports Betting Operator of the Year at this year’s EGR Awards.  The Awards winners will be announced at a gala dinner taking place at London’s Old Billingsgate market on 30 November, the first night of EGR Live, eGaming Review’s free to attend two-day conference and exhibition.

Don't miss out on egaming news: sign up for our free, daily Snapshot email. Or get the news as its breaks with the free eGaming Review RSS feed.

Posted: 18/11/2009