An Australian High Court ruling, which found Western Australia’s ban on betting exchanges unfair because it contravened section 92 of the Australian constitution, means that Betfair may soon be able to conduct business throughout Australia.
Betfair was launched in the UK in 2000 and is the world’s largest internet betting exchange. The company’s Australian arm is part-owned by the Packer family, with operations based in Tasmania where Betfair was granted an operating licence in return for a fee.
Australian authorities have been resistant to Betfair operations because exchange betting enables punters to bet on horses losing races – creating a notional risk of increased levels of race fixing.
Reactions to the High Court ruling have been predictably mixed and varied.
Tabcorp’s general manager of corporate affairs, Bruce Tobin, said the decision puts the racing industry at risk: ‘State governments are rapidly losing control over their wagering markets.’ Betfair has proposed to pay Racing NSW 27 cents out of every $100 bet. Bookmakers currently pay $1 and the TAB pays $5. Based on these figures, drainage of betting activity into the betting exchange would have obvious implications for the racing industry and its funding levels.
Queensland Racing Limited chief operations manager, Malcolm Tuttle, warned that the racing’s governing body in Queensland could approach the state government to amend legislation to protect wagering growth. ‘Our major revenue streams come through wagering with Unitab, so we won’t be taking any decisions that will erode that revenue stream,’ he said.
Unitab’s chief executive of wagering in Queensland, Barrie Fletton, conceded that Betfair activity in every state is an inevitable consequence of the High Court decision. He also revealed that Unitab will consider setting up its own betting exchange service to rival Betfair. ‘If it looks like something the public embraces we’ll set up our own service, similar to Betfair. That would stop any revenue leakage going from Queensland into Tasmania.’
Gambling Law expert Jamie Nettleton said that another upshot of the High Court ruling would be Northern Territory corporate bookmakers competing in NSW and Victoria.
Centrebet welcomed the judgement saying the decision was a major step forward in opening up national wagering markets. The bookmaker’s managing director Con Kafataris said Centrebet was seeking legal advice to better understand the decision and the opportunities it presents to the industry and to punters. ‘I think the national racing industry would benefit enormously if betting operators were better able to compete more openly. Centrebet is well placed to exploit the considerable growth opportunities that would arise,’ he said.
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