Tuesday, 3 April 2012: Many of you would be aware of Friday's verdict by the High Court of Australia which rejected Betfair's appeal against the decision by Racing New South Wales and Harness Racing NSW to impose a fee of 1.5% of wagering turnover for the right to publish NSW race fields.
Betfair had claimed that a turnover fee was unconstitutional on the grounds that it is discriminatory and protectionist in its nature.
Betfair customers understand that our product differs significantly from that of a traditional bookmaker and the totes, providing innovative ways of engaging with wagering and racing and a new value proposition that provides an incremental benefit to the punter and therefore to racing.
A turnover tax reduces competition, and therefore marginalises punters, as it equates to a much larger percentage of Betfair's overall revenue than our competitors.
The High Court's ruling means that it is now six‐times more expensive for Betfair to offer New South Wales racing than any other state in Australia.
While we are obviously disappointed with the decision, it is crucial our customers understand that it is very much 'business as usual' at Betfair and that we remain committed to Australia and our customers.
Of course, we will be reviewing the commercial options available to us in order to best respond to the judgment and we will keep you informed of any action that we take.
Contrary to many reports, Betfair pays product fees to all racing and sports codes in Australia, including Racing NSW, and we work closely with governing bodies to maintain a high level of integrity.
Much of the media coverage of this matter has been one‐sided and largely suggests that this verdict is a huge win for racing. This is not our view as what is bad for the punter is also ultimately bad for racing.
We remain firmly of the belief that the racing industry will suffer in the long term as a result of a turnover based system, which significantly affects racing's ability to compete with other forms of gambling.
There is a funding option available to racing, as recommended by the Productivity Commission, based on a wagering operator's revenue that will provide sustainable product fees to racing. In fact at certain levels a revenue fee will return more to the racing industry than a turnover based system.
A revenue fee will also ensure revenue streams through sponsorship and advertising whilst still fostering competition among all wagering operators.
Competition is paramount in any industry and a highly competitive wagering landscape is good for you, the punter, as well as the racing industry.
Betfair values its customers immeasurably and believes that the punter is racing's most important asset.
We will continue to ensure we offer the best product selection in the marketplace and will strive to provide you with a quality customer experience.
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