Australian High Court denies challenge by Betfair,
Sportsbet
The High Court in the Australian capital of Canberra ruled Friday that there
is no constitutional conflict in Racing New South Wales’s collecting a 1.5
percent tax on turnover from bookmakers Sportsbet and the betting exchange
Betfair in exchange for their use of raceday information.
The ruling means that the more than A$120 million that Racing NSW collected
in fees from the companies since July 2008 will be released, with an increase in
prize money the immediate objective. In the works is a A$150 million
redevelopment of Randwick Racecourse and A$24 million worth of upgrades at
Rosehill.
“The result is not just a victory for Racing NSW, but a victory for the
50,000 participants in Thoroughbred racing in New South Wales whose hard work
puts on the fantastic show which is Thoroughbred racing,” said Peter V’landys,
chief executive of Racing NSW. “Racing NSW can now utilize the fees collected
for the benefit of all those participants.”
Added John Messara, chairman of Racing NSW, “After four years of uncertainty,
the High Court’s dismissal of the appeals by Sportsbet and Betfair unlocks
immediate and future funding that will flow directly to the people who work and
invest in NSW racing. But today is only the beginning for New South Wales, as we
set our sights on becoming a leading jurisdiction in world racing. There is much
to be done to improve the viability of our participants and to assist race clubs
with track and infrastructure improvements, especially in country areas.”
The betting operators argued that the 1.5 percent charge was in violation of
the constitution and instead advocated for a 10 percent share of gross profits,
similar to the model which exists in the states of Victoria and Queensland.
“We’re obviously disappointed with the decision,” Betfair Australasia CEO
Giles Thompson stated. “We maintain our belief that a gross-revenue model is the
fairest basis on which to tax wagering operators. However the High Court has
made its decision, and when the dust settles, we hope to sit down with the NSW
racing bodies and endeavor to reach a commercially viable arrangement for the
future. This finding essentially means that it is six-times more expensive for
Betfair to offer New South Wales racing to customers compared to offering racing
from any other state in Australia. A turnover fee will place extreme pressure on
our ability to continue to offer our customers what we believe is the best
product in the market.”
Racing Victoria Chief Executive Rob Hines also lauded the decision, and
indicated that the body would pursue a similar course as Racing NSW when current
agreements expire this coming August.
“A report will now be provided to the Racing Victoria Board that will
determine the structure and timing of any changes to our product fee regime,”
Hines commented.
Under the current gross-revenue structure in the state, RV expects to bring
in A$53 million in race field fees. Under the 1.5 percent of turnover model,
that number would be A$54 million.