Sportsbet, Betfair lose Australian court cases

Sportsbet and Betfair both lost cases in Australia’s Federal Court yesterday over the payment of turnover fees to Racing NSW for the use of racefields information.

Betfair lost its appeal over Racing NSW’s right to impose a fee of 1.5% of turnover under racefields legislation introduced in September 2008. The betting exchange had argued the fee was discriminatory in favour of monopoly incumbent Tabcorp, equating to around 60% of its gross revenue compared to less than 10% of the TAB’s.

The Federal Court on Tuesday also ordered Paddy Power-owned Sportsbet to pay millions of dollars in costs after overturning June’s decision in the same court that that the fee was protectionist towards the TAB.

Betfair Australasia chief executive Andrew Twaits told the Sydney Morning Herald it was “another disappointing result” but hinted it would continue with its action.

“We do think we have a strong claim and the fee is manifestly unfair. We have a couple of options. One is to run a fresh case on appeal. Another option is to go to the ACCC [Australian Competition and Consumer Commisson] with some compelling evidence of anti-competitive conduct.”

Both Sportsbet and Betfair now have 28 days to seek leave to appeal, but Racing NSW chairman Alan Brown told the newspaper he remained optimistic about the outcome.

“It was a unanimous result upholding the legislation. A decision on whether they are successful in that application would not be likely until early next year. But this is an historic day for racing in this state and could be a blueprint for the rest of Australia. We wanted certainty and this was the only way to get it.”

Brown said the AU$120m collected in fees under the legislation to date would be invested in upgrading racing facilities in NSW, in increasing prize money and improving the conditions and wages of industry participants, but that these monies would be held back pending the final outcome of the court process.