Australia: Federal Court orders greater transparency by Betfair

Racing NSW described the court’s decision on Tuesday as a step forward in securing the jobs and income levels of the NSW thoroughbred racing industry’s 50,000 participants.

The dispute between Racing NSW and corporate bookmakers stems from the decision by Racing NSW to impose a Race Fields fee of 1.5 % of turnover on all NSW thoroughbred horse races from September 1st 2008.

Resisting payment of the fee on a turnover basis, Betfair and SportsBet instigated legal action against Racing NSW. In Federal Court, last Tuesday, the Full Bench set aside a previous order by Justice Perram, made on May 21st 2009, in respect of the extent of discovery to be provided by Betfair in Federal Court.

In setting aside the previous order, the court accepted the submissions of Racing NSW and Harness Racing NSW, which argued that they were entitled to access documents relating to Betfair’s profitability.

The court ordered Betfair to provide discovery in accordance with the schedule provided to the court by senior counsel for Racing NSW and Harness Racing NSW, and also ordered Betfair to pay the costs of both organisations in respect of the appeal of the orders of Justice Perram.

According to Racing NSW, Betfair had previously resisted providing discovery of documents relating to its profitability. Yesterdays decision provided a further boost to the New South Wales racing industry, following last week’s decision by Justice Davies of the Supreme Court of Victoria in Tabcorp’s case against Racing Victoria.

In that case, the court determined that the model of calculating Race Field fees based on gross revenue, the method preferred by corporate bookmakers and Betfair, “was void for uncertainty because the amount payable is not capable of precise quantification”.

Racing NSW has argued that all wagering operators should pay 1.5 % of turnover, rather than a percentage of gross revenue.