Betfair Initiates More Aussie Litigation
October 6, 2008 (InfoPowa News) — Australian racing media Thoroughbred News and Racing and Sports are reporting that betting exchange Betfair has issued proceedings in the Federal Court of Australia challenging the validity of decisions by Racing NSW and Harness Racing NSW to impose a 1.5 percent turnover fee for all wagering operators wishing to cover NSW thoroughbred and harness races.
The proceedings in the Federal Court are brought under section 92 of the Constitution, alleging discriminatory conduct in interstate trade and commerce.
Betfair succeeded in a separate section 92 action against the Western Australian government earlier this year.
Andrew Twaits, Betfair's director for corporate and business affairs and Australian CEO designate, was quoted as saying: "We're happy to pay a fee to the NSW racing industry on all our wagering revenue, but the turnover fee imposed by Racing NSW and Harness Racing NSW is highly discriminatory.
"The fee equates to around 60 percent of our gross revenue but less than 10 percent of TAB's revenue. Both RNSW and HRNSW are fully aware that it's impossible for us to compete on those terms. They've left us with no option but to challenge the validity of their decisions.
"The only fair basis on which to charge for race fields is to implement a gross revenue model where every wagering operator pays at the same rate. That way, even if there is any transfer of customer expenditure from the TABs to other wagering operators, the NSW racing industry will continue to get the same proportion of revenue from every dollar spent by punters."
Betfair has received approval from all three racing codes in NSW to publish their race fields. Betfair has said that any payments made to Racing NSW and Harness Racing NSW will be made under protest — pending the outcome of these proceedings.
Betfair is licensed as a wagering operator in Tasmania and is legally permitted to accept bets from customers throughout Australia. Betfair already pays taxes and product fees to Tasmania that equate to 35 percent of its gross revenue.