NSW Win Court Case

[Shaun]

http://www.smh.com.au/sport/horseracing/racings-100m-windfall-after-court-ruling-20120330-1w22x.html

I have no issue with them paying but to pay on turn over gives them no incentive to increase it, in fact they may decrease turnover to cut costs.

I think this will just drive more advertising and money towards sports betting.

[UselessBettor]

I fully agree with you Shaun.

Turnover is a terrible model and it should be based on profit.

[Shaun]

I can't understand why they didn't look at the business like a normal business, what other business gets taxed on turnover?

I can see all other sports going down the same path with the betting agencies and wanting a turn over fee.

How about the TAB paying the race horse owners a fee for using there product, horses.

[Shaun]

Reading the below statements seams the best option will be to drop NSW racing from there service.

From Betfair Forum
The full bench of the High Court of Australia has today rejected Betfair’s claim that the decision to impose a 1.5% wagering turnover fee for the right to publish NSW race fields was unconstitutional on the grounds that it is discriminatory and protectionist in its nature.

Betfair was given special leave to appeal to the High Court, seeking a declaration that the fee placed a discriminatory burden on Betfair’s ability, as an inter-state operator, to compete with TAB Limited, an intra-state operator in New South Wales.

Betfair’s claim did not challenge the race fields legislation itself, which gives racing bodies the right to impose fees on wagering operators. Betfair has always maintained that wagering operators should pay a fee to the racing industry.

Betfair Australasia’s CEO, Giles Thompson, said, “We’re obviously disappointed with the decision. We maintain our belief that a gross revenue model is the fairest basis on which to tax wagering operators.

However the High Court has made its decision and when the dust settles we hope to sit down with the NSW racing bodies and endeavour to reach a commercially viable arrangement for the future.

“This finding essentially means that it is six-times more expensive for Betfair to offer New South Wales racing to customers compared to offering racing from any other state in Australia.

“A turnover fee will place extreme pressure on our ability to continue to offer our customers what we believe is the best product in the market.

“It will directly and significantly reduce the competitiveness of wagering on racing in NSW. It is ultimately the punter who will pay for this lack of competition as it will impact on the variety, quality and value of betting on racing in NSW.

“Despite this setback in NSW, Betfair remains optimistic about its position in the Australasian marketplace – we will continue to approach the future with a great degree of confidence and enthusiasm.”


NOTES TO EDITORS

• Betfair is Australia’s only licensed betting exchange. A betting exchange is a wagering operator – just like the TAB or a bookmaker – but it relies on state of the art technology to enable it to operate in a similar way to the stock exchange by effectively matching bets by punters with opposing views about a particular race or sporting event.

• Betfair Australasia is a 50:50 joint venture between Crown Limited and Betfair Group plc and has been licensed in Tasmania since February 2006. Betfair Australasia currently employs approximately 160 people in Australia – most of who are based at the company’s operational headquarters in Hobart.

TIMELINE OF COURT PROCEEDINGS

• Betfair issued proceedings against the NSW racing bodies in the Federal Court of Australia in September 2008 alleging that the turnover fee was in breach of section 92 of the Constitution because it discriminated against Betfair and was protectionist in nature.

• In June 2010 the Federal Court of Australia found that the fee did discriminate against Betfair as compared to the NSW TAB however Betfair failed to prove that it was protectionist in favour of NSW TAB.

• In November 2010 the Full Court of the Federal Court of Australia rejected Betfair’s appeal. Betfair obtained special leave to appeal to the High Court of Australia.

• In March 2012 the High Court of Australia rejected the appeal of Betfair and ruled that the turnover fee imposed by the NSW racing bodies was not in breach of section 92 of the Constitution.

[norisk]

Fairly sure I heard a snippet on TVN/SKY that Racing Victoria are now going to look at increasing their fees which I believe are based on the gross revenue model.

Havent got a problem with the corporates & Betfair paying their fair share & I would assume that some middle ground will eventually be met.

Betfair's response longterm will be interesting...could this be the start of the end for them downunder?

[garyf]

Sportsbet also fought with Betfair there response was this.Sportsbet accepts the umpire's decision

Sportsbet’s marketing director Barney Evans described the High Court of Australia’s ruling that Racing NSW can charge a turnover based fee on NSW racing as "disappointing” but he said the corporate bookmaker will "respect the decision”.

The High Court of Australia’s Chief Justice French announced that shortly after 10am that a panel of Australia’s High Court judges had dismissed appeals by Sportsbet and Betfair against Racing NSW’s 1.5 percent face field legislation fee.

"It’s disappointing but it’s not the end of the world and our focus now turns exactly in the direction it should and that’s protecting our customers,” Evans told Sky Racing.

"We won’t pass any costs onto them.

"We’ll work doubly hard to ensure that they continue to get the best product, the best service and the best prices from Sportsbet.

"We’ve always paid product fees, we’ve paid them in every state in Australia to all the racing codes and we’ll continue to do that now.

"That’s not the issue, we’re very happy to pay for a good product, all we were seeking was a level playing field so that we can compete fairly against the TAB (http://www.racenet.com.au/tabs/tab.asp)that have a built in advantage against us.

"That hasn’t happened, we respect the decision, this is the High Court of Australia and their decision is appropriate.

"We’ll just continue on delivering the best value for customers.”

Evans said now it is time to move forward, working with Racing NSW.

"What we can do now is draw a line in the sand and everybody work together to focus back on the most important people in racing and that’s the punters,” he said

[aussielongboat]

the problem if you do it on profit is that firstly it is rorted and secondly you end up with rules and regulations with more clauses than the tax act.

individual stand up bookmakers have been paying it on t/o for years.

[Shaun]

With bookmakers it is not as bad a situation as they just make 1.5% less on the races, if they set a book at 20% and it runs well they make 18.5% on that race.

With the betfair model is different, i am not sure how they plan on taxing the lay side, i did hear that this would only effect backers but lets say this was true and on a race you backed a runner $1000 @ $10.00 your profit is $9.000 and betfair get $450 in comms they would have to pay $15 in tax.

If you were paying 2% comms they would still get $180 then have to pay $15 does not seam all that bad.

[Mark]

Sportsbet also fought with Betfair there response was this.Sportsbet accepts the umpire's decision

"We’ll work doubly hard to ensure that they continue to get the best product, the best service and the best prices from Sportsbet.

"We’ll just continue on delivering the best value for customers.”



Unless of course if they win............then we'll ban them.

[garyf]

Goes without saying as i am one them.

Cheers.

[moeee]

Goes without saying as i am one them.


I wish I was :(

[Chrome Prince]

Well, got the prelude to the commission changes today.
A warm fuzzy email with "we'll let you know"

Brace for the hike :P

[Shaun]

Yes they will be planning something for sure.

[UselessBettor]

Yep also read it.

Reading between the lines the commission will increase significantly on NSW races.

Give it a week or so.

[OM SHARNTEE]

Yes

--they will increase commission and there will be a commensurate decrease in turnover --

so "NSW" will be no better off anyway.

[jose]

Can they pick and choose what and where they charge commission?
Lets hope they don't increase it across the board, and only stick to NSW, as that should be easy to navigate around, but as OS has stated the decrease in turnover only hurts NSW racing.
I am still a bit confused as to where all this will lead really.

[UselessBettor]

jose,

They do have the ability to pick an choose commission rates per event. Just check the rules page for each event and it says what the commission is for the event.

We can't expect them to run markets at a loss. They are a business. So the only choice they have is to charge extra commission.

[jose]

Fair enough UB.
It shouldn't be too hard to combat it then.

[Shaun]

I will take bets it is an increase in all racing markets, why just get back to where you were when you have the opportunity to increase it.

[The Ocho]

They may also add extra for the carbon tax as there is no doubt that all that horse dung is polluting the atmosphere.

[Raven]

Seems odd that the dishlickers are embracing the gross revenue model. Maybe they see the potential benefits of BF to punters & therefore to their industry.

Since I began laying in May last year, I have made a 22.8% profit. If BF increase their cut to 10%, according to my spreadsheet the profit would drop to 18.7%. I guess I can live with that.

But then again I may have to ask Moeee to teach me about form study for the grey's.

[Chrome Prince]

I will take bets it is an increase in all racing markets, why just get back to where you were when you have the opportunity to increase it.

I think it will be an increase in all AUS markets also.
They need to not only address this NSW situation, but also allow for future rulings as a precedence has now been set.

With commission as it stands, various additional premium charges and now a turnover tax, there is no doubt that at the lower end of the market other products will be better for backers.

One question remains, will they calculate turnover as they do matched amounts, i.e. back plus lay, or only the backers stake.
If it's both, then I'm in huge trouble. :(

1.5% of turnover is a massive hit, considering 1% in commission reduction makes such an impact calculated on winnings only.

[moeee]

There is a smelly Rort that the TAB's use when they are caught up with Losing Wagers.

What TAB does when the approximate dividend for a Place mathematically works out to less than $1 , they are compelled by legislation to pay the Minimum Dividend of $1 or $1.04 , instead of finding the Extra Money from their Profits , they take it out of the place payouts from the other runners.

Perhaps Betfair could do something similar by introducing a Rule that whenever the 1.5% Turnover Commision exceeds the 5% Profit Commision on a single Wager , some Safety Rule kicks in.

[Shaun]

I give betfair 6 months in OZ

http://www.thoroughbrednews.com.au/Australia/default.aspx?id=59133