BUSINESS

Betfair, Sportsbet lose Australian High Court fight over NSW racing fees

TAGs: Australia, racing nsw, Sportsbet

betfair-sportsbet-australia-high-courtAustralia’s High Court has unanimously ruled in favor of New South Wales racing organizations in their long-running battle with betting outfits Betfair and Sportsbet over fees charged for race field data. NSW passed legislation in 2006 that allowed Racing NSW and Harness Racing NSW to levy fees on bookmakers amounting to 1.5% of betting turnover. Betfair and Sportsbet challenged the fees as a breach of the Australian Constitution’s free trade provisions and suggested a fee based on gross revenue was more appropriate. The betting outfits lost a Federal Court appeal in 2010, but doubled down on getting a more favorable result at the High Court in Canberra. Sadly, their nag didn’t come in, meaning the NSW racing bodies get to keep the $100m+ in fees that Betfair and Sportsbet had hoped to claw back.

In rendering their decision, the judges declared the fees were valid under the terms of the NSW legislation. Moreover, the fees were imposed uniformly on operators regardless of whether they were intrastate or out of state and thus were neither discriminatory nor protectionist. The judges also failed to identify a connection between a betting firm’s location and its turnover.

Understandably, Racing NSW chairman John Messara welcomed an end to “four years of uncertainty,” and celebrated the money that had been held in limbo but will now flow into prize money at the tracks. NSW Racing Minister George Souris said the decision would “become the legislative national template to ensure the racing industry receives its fair share of fees from wagering operators.” Racing NSW CEO Peter V’landys called the ruling “terrific news for NSW racing but also for other race organizations in Australia and the world. It will also have ramifications for other sporting bodies.”

Sportsbet CEO Cormac Barry rejected the notion that the decision would serve as a template for much of anything. Other states “may review the fee that they charge, but my understanding is that their preference is for a gross-profit model.” As for other sports, Barry didn’t think wagering was “as core” to their business model. Sportsbet marketing director Barni Evans told the Australian Associated Press the ruling was disappointing, but said the firm wouldn’t attempt to pass on its costs to their customers.

Tabcorp CEO David Attenborough said it was “important that racing is able to charge a fee for its product that allows it to continue to be successful.” That last quote borders on taunting, given that Betfair had claimed Racing NSW had entered into a conspiracy with other bookmakers – including Tabcorp – to deliberately target the two firms. Betfair Australia CEO Andrew Twaits even claimed Tabcorp had been “running the case” in a bid to hobble a rising competitor. A year ago, Twaits said he was looking forward to “getting some finality” in the High Court. Careful what you wish for.

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