NSW Race Fields Legislation - Constitutional Challenge by Betfair and Sportsbet - Round 2

Does this Mean Clarity for Wagering Operators in Australia? Will There be a Round 3?

Executive Summary

Today's decisions by the Full Court in Betfair Pty Ltd v Racing New South Wales 1 and Racing New South Wales v Sportsbet Pty Ltd2 are a significant event in the discussion relating to the validity of Australian race fields legislation. In its decision, the Court has acknowledged the validity of the New South Wales race fields regime by refusing to declare as invalid and contrary to the Constitution either the race fields regime or the approvals granted to wagering operators.

As a result, unless an appeal is lodged successfully to the High Court, or further court proceedings are commenced, wagering operators are required legally to pay a fee in respect of the use of New South Wales race fields calculated on the basis of 1.5 per cent of turnover.

What are the decisions?

In the Betfair case, the Court dismissed Betfair's appeal. The Court held that the primary judge was correct to conclude that Betfair had not made out its case by failing to demonstrate that a competitive advantage had been conferred on intrastate operators by using turnover as a benchmark.

In the Sportsbet case, the Court upheld Racing NSW's appeal. The Court held that, among other things, the race fields regime introduced by the Racing Administration Act 1998 (NSW) (the RAA) and the Racing Administration Regulation 2005 (NSW) (the RAR) was valid as it imposed a burden equally on all operators. Its validity was not affected by virtue of separate action being taken in good faith which had the effect of causing...