Last week, the High Court of Australia (Australia's highest court) heard each of the appeals of Betfair and Sportsbet in respect of the findings of the Full Federal Court last November.1
Both cases will require a determination by the High Court as to whether section 92 of the Australian Constitution prevents Racing New South Wales from levying a fee of 1.5 per cent of turnover under its race fields regime.
Betfair's position is that the use of turnover as a benchmark for the calculation of race fields fees is discriminatory and designed to protect local operators, primarily TAB Ltd (the operator of the NSW totalisator).
Sportsbet had initially argued that the entire legislative scheme is invalid but our understanding is that this argument has been narrowed and that Sportsbet is now submitting that the turnover fee is invalid because of arrangements between Racing New South Wales, TAB Ltd and NSW bookmakers that mean NSW operators are protected from the impact of the fee.
In its appeal, Betfair argues that the trial judge was incorrect in stating that Betfair had to show that the discrimination imposed by the turnover fee was protectionist when there was already evidence that it was vastly discriminatory in terms of cost.
Sportsbet argues in its appeal that the decision of the Full Federal Court (which overturned the trial judge's decision in Sportsbet's favour) was incorrect because it analysed the imposition of the fee and the relief granted to NSW operators as two separate actions rather than a "package of measures" that must be looked at together.
The impact of the decision on the race fields regime, and other legislative provisions, in each Australian State and Territory which restrict the operations of interstate licensed bookmakers is potentially considerable. It will be of particular interest whether the High Court is prepared to expand on the principles it enunciated in the original 2008 Betfair case.2 Also, the decision is likely to affect significantly the outcome of any appeal relating to the Betbox decision (see below).
We will inform you of the decision which we expect to be handed down later this year or early 2012.
2 See our Focus Paper at http://www.addisonslawyers.com.au/focuspaper/68 on Betfair v WA.
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