This morning the Full Bench of the High Court unanimously
dismissed both the Sportsbet Pty Ltd and Betfair Pty Ltd appeals
from the Full Federal Court with costs. The decisions have been
much anticipated and have widespread implications for the industry.
They provide much needed certainty for the NSW race fields regime
which has been effectively frozen for some three-odd years, and in
a broader sense, for the variety of other legislative race fields
regimes around Australia.
While each case was conducted differently, both Sportsbet and
Betfair questioned the validity of the fee conditions imposed under
the Racing Administration Act 1998 (NSW) and Racing Administration
Regulations 2005 (NSW) on the basis that they offended Federal laws
guaranteeing freedom of interstate trade and commerce between
States and Territories. It was argued that the 1.5% fee on turnover
was a discriminatory and protectionist burden upon interstate
By way of brief summary, in both decisions, the High Court found
that the relevant race fields approvals granted by HRNSW and RNSW
which required the payment of the 1.5% turnover-based fee were
valid. Some key findings in the majority judgements include:
It was found that the power of approval conferred by the Race
Fields Legislation does not have the legal or practical effect of
imposing a burden or disadvantage on trade and commerce between the
Northern Territory and NSW which was not imposed on intrastate
trade and commerce of the same kind.
The concept of "practical operation or effect" was
discussed at length. Relevantly, it was found that the practical
operation of the $5m and $2.5m wagering threshold exemptions was
not to provide a protectionist measure to insulate NSW on-course
bookmakers as both intrastate and out of State competitors could
benefit from the threshold. With respect to the payments under the
Deed of Release associated with the Racing Distribution Agreement,
it was found that the Full Court correctly concluded that TAB did
"not obtain a discriminatory advantage, protectionist or
otherwise over Sportsbet by virtue of the payment to TAB under [the
It was found that the practical operation of the fee structure
did not show an objective intention to treat interstate and
intrastate trade in wagering transactions alike, notwithstanding a
relevant difference between them.
It was found that, in any event, the fee structure did not
burden interstate trade to Betfair's competitive disadvantage,
noting that Betfair did not demonstrate that the likely practical
effect of the imposition of the fees would be a loss to it of
market share or profit or an impediment to increasing share or
At first blush, it appears that there are nuances in the
decisions which require close examination in order to fully
appreciate the ramifications for the various industry participants.
Clayton Utz will be conducting that examination and monitoring
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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