A High Court win for on-line betting exchange Betfair has left the WA racing industry crying poor and other states looking for ways to limit their losses.
Tasmanian-based Betfair today won its challenge against WA laws that banned local residents from placing bets using the exchange and restricted Betfair’s access to race fields.
The High Court ruled the legislation contravened section 92 of the constitution by imposing protectionist burdens on interstate trade.
Betfair, which was launched in Britain in 2000 and now claims to be the world's largest internet betting exchange, is part-owned in Australia by the Packer family.
It doesn’t accept bets unless there is a matching bet from another punter backing the opposite outcome, thereby avoiding the risk a regular bookmaker assumes.
Controversially, Betfair also allows punters to wager on which horse, greyhound or team will lose, rather than the winner.
Racing officials and state governments believe such “lay” bets could harm the industry’s integrity.
But they are more worried about Betfair stealing revenue away from the industry’s own TAB outlets.
Perth Racing chairman Ted van Heemst said Betfair paid the industry just one-fortieth the amount the TAB did.
“It undermines the financial viability long term,” Mr van Heemst said.
“The economic model that Betfair operates under does not compensate the industry for putting on the show.”
WA Racing and Gaming Minister Ljiljanna Ravlich agreed, saying “the big loser out of the decision is the WA racing industry”.
Justice John Heydon said the legislation was discriminatory and protectionist because instead of providing “for a neutral contribution to the persons conducting Western Australian races” it had “a tendency to exclude” Betfair.
After the unanimous decision was handed down, Queensland's Unitab warned it was considering setting up a rival betting exchange.
“It’s not particularly attractive,” Unitab’s wagering chief Barrie Fletton said.
“(But) if it looks like something the public embraces we’ll set up our own service, similar to Betfair.
“That would stop any revenue leakage going from Queensland into Tasmania.”
Queensland Racing’s chief operations manager Malcolm Tuttle said the racing industry could approach the state government to amend laws to protect wagering growth.
“Our major revenue streams come through wagering with Unitab, so we won't be taking any decisions that will erode that revenue stream,” Mr Tuttle said.
In NSW, parliament has already passed laws requiring betting exchanges to pay a licence fee to use NSW race fields information.
Racing NSW chief executive Peter V’Landys said as a result the High Court ruling would have less of an impact in his state.
“Betfair should be given the opportunity to make application like any other wagering operator, and if it meets all the criteria it can field on NSW events,” Mr V’Landys said.
“But in the past they have wanted to pay a smaller fee than any other parties. They wanted an advantage.”
Racing Victoria said it would “await advice from the state government in relation to any implications that the decision may have with respect to Victorian race fields legislation”.
Online sportsbook Centrebet said the ruling was a significant development.
“It’s a major step forward in opening up the national wagering market,” managing director Con Kafataris said in a statement.
