Betfair and Sportingbet challenge Australian ad ban

Betfair and Sportingbet Australia have launched a challenge in the Federal Court of Australia to laws that prevent interstate-licensed operators from advertising or sponsoring racing or sporting events in New South Wales (NSW).

Commenting on the legal action, Andrew Twaits, director of corporate and business affairs for Betfair in Australia, said the ‘protectionist’ laws deprived racing clubs and other stakeholders of valuable advertising and sponsorship revenues.

“We think the legislation is invalid and, more importantly, is holding back the growth of the NSW racing industry through a misguided attempt at protecting the NSW TAB’s wagering monopoly,” he said.

Although gambling in Australia is traditionally the subject of the laws of individual states, relations between them are governed by the Australian constitution. The NSW laws banning advertising by betting companies licensed outside the state have been susceptible to challenge since March, when Tasmanian-licensed Betfair won a groundbreaking ruling in the High Court of Australia that government laws banning state residents from using a betting exchange were unconstitutional as they imposed protectionist barriers on interstate trade.

Twaits confirmed to eGaming Review that Sportingbet and Betfair’s joint action will proceed on the same basis as March’s landmark ruling. “The challenge is based on section 92 of the constitution, which is the same provision of the constitution on which we relied in challenging the validity of the Western Australian Government’s laws to ban betting exchanges in that state. We are seeking a declaration that the laws relating to the advertising restrictions in NSW are invalid,” he said.

Michael Sullivan, chief executive of Sportingbet Australia, added: “We believe this legislation is fundamentally flawed and it contradicts the spirit of business in Australia by restricting fair and open trade between the states.”

Sportingbet and Betfair’s action has been launched in the wake of the NSW government’s July 1 announcement that all interstate TABs, bookmakers and betting exchanges will be required to pay for the right to use NSW racing information under race fields legislation which comes into force on September 1.

Twaits explained that Betfair was happy to pay a fair fee to the state’s racing industry, but that the additional levy undermined their ability to compete on a level playing field.

“The two issues are unrelated in a legal sense. However, in a practical sense, the government’s failure to lift the interstate advertising regulations at the same time as they enacted race fields legislation – requiring all interstate wagering operators to pay product fees in NSW on top of what they pay in their local jurisdictions – finally put to rest any suggestion that the government was willing to embrace competition in the local wagering landscape.”

In a statement published the day following the initiation of legal proceedings, NSW Racing countered by saying that the fee still represents competitive value to interstate operators, and that its introduction is necessary to protect industry participants from mounting financial hardship. A spokesperson for NSW racing minister Graham West also said in a statement to Australian Associated Press: “The legislation being challenged is about protecting the NSW racing industry, a significant employer in this state. As the matter is now before the courts, it would be inappropriate to comment further.”