Bookies Race Against State Odds In Court

Sydney Morning Herald

Friday July 11, 2008

Jonathan Dart and Craig Young

TWO interstate betting agencies are taking the State Government to court, claiming its ban on them advertising in NSW is unconstitutional.

The Government faces the loss of millions of dollars in annual tax revenue if it loses the case.

Tasmania's Betfair and the Northern Territory's Sportingbet lodged legal proceedings in the Federal Court yesterday, arguing the advertising bans are protectionist and illegal under the constitution.

The restrictions were widely interpreted as a move to stop interstate online betting agencies taking gambling revenue from Tabcorp.

In 2005-06 Tabcorp provided $219 million to the racing industry's peak bodies and $226 million in taxes to the State Government. Online bookmakers now provide no money to either.

The legal challenge will have ramifications for the Government's controversial "Race Fields" legislation, introduced on July 1, which restricts online bookmakers from publishing material about NSW thoroughbred, harness and greyhound races.

The law requires bookmakers earning more than $5 million to pay the industry 1.5 per cent of all wagering turnover if they wish to publish information about a race.

Some outlets - including the Herald - have an existing agreement with Racing NSW and are allowed to publish racing material free of charge.

Online bookmakers have argued the laws are unfair and much harsher than arrangements with Tabcorp, which must pay a dividend based on profit rather than turnover.

The head of Racing NSW, Peter V'Landys, said the TAB pays $5 per $100 wagered in NSW to the Government and industry, whereas an early offer by Betfair was equivalent to 27 cents for each $100 wagered.

The parties have until September 1 to agree on a figure, though it is understood the matter will most likely be decided in court.

In March the High Court found the West Australian Government's decision to prohibit Betfair from operating in the state breached section 92 of the constitution, which prevents barriers on trade between states.

A spokeswoman for the Racing Minister said he couldn't comment on the matter while it was before the courts, but he told the Herald last month the Betfair case "brings into question the validity of our restrictions on advertising".

Mr V'Landys said the action could prove disastrous for the estimated 40,000 workers in the industry if its source of revenue is lost.

"[Interstate agencies] are getting wealthier at the expense of the workers," he said. "They can't continue to take our product and not pay anything back, or else there will be no product."

But Sportingbet Australia's chief executive, Michael Sullivan, said betting agencies would contribute to the industry via advertising revenue.

"We have always said we want to pay our way," he said.

© 2008 Sydney Morning Herald

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