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The High Court delivers it's judgement on Friday on the appeals by betting exchange Betfair and corporate bookmaker Sportsbet over the Federal Court dismissal of their case against NSW race fields' legislation.
Betfair and Sportsbet have lost their case three times in the long-running court process.
In June 2010 Justice Perram ruled the NSW legislation was valid, and that a fee that the industry decided on could be levied. The ability of Racing NSW to charge all wagering operators who used NSW race fields to wager on a fee of 1.5 per cent on turnover, not 10 per cent of gross profit, was ruled to be valid.
The other challenge was over the threshold that Racing NSW used to commence the 1.5 per cent fee, which was $5 million of a bookmaker's turnover. Most NSW based bookmakers have turnover of less than $5 million with the threshold to assist them in competing with the 0.33 per cent turnover fee for bookmakers in the Northern Territory.
Sportsbet argued that the threshold discriminated against interstate trade as it meant that NSW bookmakers were exempt from the 1.5 per cent fee, until $5 million turnover was reached, and the Northern Territory bookmakers such as Sportsbet were not. Justice Perram agreed.
“The impost is a protectionist burden which discriminates against traders in the Northern Territory and is unlawful. The approvals issued by RNSW and HRNSW to Sportsbet subjecting it to a condition that it must pay the 1.5 per cent impost are invalid and Sportsbet is entitled to a refund of the money it has paid under protest.,” said the judgement.
RNSW was ordered to repay Sportsbet $2,061,000 together with interest for nine months' worth of fees.
This aspect of the legislation was subsequently amended in accordance with the ruling.
The Betfair case was about the fee having a much larger impact on the commission earned by the betting exchange than it had on the commission earned by the TAB, and that this was a burden on interstate trade.
Justice Perram found the discrimination was established from the nature of Betfair being a low margin operator. However, he concluded that Betfair's arguments as to why the fee is invalid are 'not correct'. He therefore dismissed the application.
Betfair and Sportsbet appealed to the Federal Court and on November 17 of 2010 the Chief Justice Keane, on behalf of himself, Justice Lander and Justice Buchanan dismissed the appeals by Betfair and Sportsbet.
At that stage the costs were estimated by legal experts at some estimated $9 million by all parties, with the majority of Racing NSW costs having to be repaid by Betfair and Sportsbet.
In December 2010 Betfair and Sportsbet applied to seek special leave to appeal to the High Court of Australia in relation to the Federal Court ruling.
On March 11, 2011, Chief Justice French, Justice Gummow and Justice Kiefel granted the leave on reduced grounds following hearings in Sydney and on August 31 the High Court commenced a three day hearing on the matter. In September the court requested further information from the Racing NSW legal team.
It is estimated that Racing NSW has collected race fields' fees in excess of $200 million under the present legislation that it has not been able to distribute to the industry pending the outcome of the appeals.
