Betfair Australia v. Racing NSW over Australian Gambling Taxes

Posted: September 30, 2010

Updated: October 4, 2017

In a legal battle that the Sydney Morning Herald claims “will shape the future of punting and racing” in Australia, Betfair is

In a legal battle that the Sydney Morning Herald claims “will shape the future of punting and racing” in Australia, Betfair is meeting the regional government-backed Racing NSW in federal court over the latter’s recent decision to tax all wagering turnover by 1.5%. Betfair is arguing a case of “discriminatory protectionism” and is arguing for the rights of intrastate commerce as defined by Australian constitutional law.

Financially, the numbers would work out far too well for Racing NSW: While Betfair takes 2.5% of wagering in commission fees, Racing NSW takes a whopping 16%. With its “high-turnover, low-margin” business model, Betfair attorney argue that a mere 1.5% tax hike is therefore equivalent to “60 percent on Betfair’s revenue and 9 percent on [Racing NSW’s].”

The decision for the tax rate was made by Racing NSW due to what they described publicly as “free riding” by gambling companies who provide online gambling in Australia within more than one state, an advantage the government-run companies don’t have.

The case is an appeal by Betfair after a case in June was ruled in favor of Betfair, but no damages were rewarded and no major change to Australian gambling laws resulted.