The Victorian gambling legislation that operates to ban online
betting kiosks was recently overturned by the Federal Court ,
opening the door to further challenges to similar laws in other
States and Territories. The Federal Court found in favour of
Sportsbet and Eureka Hotel that the provisions of the Gambling
Regulation Act 2003 (Vic) that prohibit the
operation of the Betbox (Sportsbet's online betting kiosk)
breaches section 92 of the Constitution and imposes a
discriminatory burden of a protectionist kind, preventing free
trade and commerce between the States and Territories of
The proceedings were instigated by Sportsbet and Eureka Hotel in
Victoria in September last year in the Federal Court. In March
2011, Tabcorp was added as a third respondent, joining the
Victorian Commission for Gambling Regulation
(VCGR) and the State of Victoria.
The Betbox is effectively a touchscreen computer that connects
to the Sportsbet website and allows a customer to place a bet in
Victoria with Sportsbet, a bookmaker licensed in the Northern
Territory. The Betbox is licensed by Sportsbet.com.au and is
regulated by the Northern Territory Racing Commission.
The impact of betting kiosks on the traditionally exclusive
"retail"-front presence has the potential to
significantly impact the wagering landscape. It also has potential
implications for the funding structures for the various racing
industries. We understand that Tabcorp has already indicated its
intention to lodge an appeal. Relevant to the consideration of the
potential impact of the decision is the fact that as an instrument
of the internet, Betbox does not appear to compete for cash
transactions in the relevant jurisdictions.
Betting kiosks are not a new issue in the industry. For example,
in Victoria itself, a betting kiosk "Venuenet" (also
owned by Sportsbet) was seized and removed by the VCGR as an
"unauthorised instrument of betting" almost two years
ago. In 2008 in NSW, the Cameron Report recommended that retail
bookmaking kiosks should not be permitted in NSW. The NSW
Government responded on 31 December 2010 by introducing new
provisions to prohibit the provision of "remote access betting
facilities" which includes any device (such as a computer
terminal or telephone) used primarily or exclusively for betting on
any event or contingency, or for facilitating betting on any event
We understand that Sportsbet is considering challenging these
provisions as well on the basis that they also breach section 92 of
The internet is undeniably playing its part in challenging
existing market structures in the wagering sphere and breaking down
traditionally well-defined State and Territory boundaries. A
further more detailed analysis of the Betbox decision will follow
shortly, as well as a discussion of the upcoming
section 92 Betfair/Sportsbet race field cases, both of which
are scheduled to be heard in the High Court in Canberra next
Clayton Utz will be closely monitoring these key industry
developments. In the interim, please contact Tony Rein, Chris McLeod or Kym Fraser
for further information.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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