Racing New South Wales regulator seeks relief from having to refund over two million dollars it took from interstate gambling provider in fees.
Wednesday 14th July 2010
In Australia, regulator Racing New South Wales has filed a formal appeal against last month’s Federal Court ruling that required it to refund over two million dollars in fees to corporate bookmaker SportsBet Party Limited.
Darwin-based SportsBet is majority-owned by giant online and land-based bookmaker Paddy Power and argued successfully that paying the fees constituted an illegal protection of TabCorp Holdings Limited over interstate gambling providers.
TabCorp's Tab Limited has an exclusive retail licence to provide wagering throughout New South Wales until 2013 and has a 95 percent market share. It pays various fees as part of this licence, which amounted to $221 million for the 2006 to 2007 financial year while its turnover was $3.3 billion last year.
Racing New South Wales began charging all bookmakers a 1.5 percent fee on turnover over five million dollars in 2008 for the right to use race field information. The state government promised that this would stop ‘free riding’ by online and telephone bookmakers registered in other states that it said were likely to take $150 million from Tab Limited over the next decade and $719 million by 2028.
However, SportsBet disagreed and took the matter to court with Justice Nye Perram stating that there had been ‘no doubt’ that low-margin interstate corporate bookmakers were a threat to TabCorp but that Racing New South Wales could not portray itself as an independent regulator as it had a commercial gain in Tab Limited’s success and a conflict of interest in imposing fees.
Justice Perram ruled that the race field legislation was legal but the methods used to collect the fees were discriminatory. He ordered Racing New South Wales to refund $2.1 million in collected in fees from SportsBet for the nine-month period up until the end of the previous financial year.
However, he has since dismissed an application from SportsBet that would have seen the bookmaker recover the fees it paid for the 2009/10 financial year.
Racing New South Wales has now modified the race field information scheme by eliminating the five million dollar fee-free threshold, which means that all wagering operators must pay the 1.5 percent fee from the very first dollar bet.
