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NSW Court Confusion 4: Key Sportsbet Case Details

Thursday, 17th June 2010

Sportsbet challenged the NSW 1.5% race fields fee (based on turnover) on 2 grounds: because Tabcorp had its race fields fee refunded (under a pre-existing 1997 contract); & because the threshold Racing NSW used to commence the 1.5% fee is $5 million of a bookmaker's turnover (most NSW bookmakers have turnover less than $5 million & the threshold assists them to compete with the 0.33% turnover fee for bookmakers in the Northern Territory). Sportsbet argued the threshold "discriminated against interstate trade" as it meant NSW bookmakers were exempt from the 1.5% fee, until $5 million turnover was reached, and Northern Territory bookmakers such as Sportsbet were not. Justice Perran agreed, ruling: "The impost is a protectionist burden which discriminates against traders in the Northern Territory & is unlawful. The approvals issued by Racing NSW to Sportsbet, subjecting it to a condition that it must pay the 1.5% impost, are invalid & Sportsbet is entitled to a refund of the money it has paid under protest." Racing NSW was ordered to repay Sportsbet $2,061,000 plus interest for 9 months. However the judge also noted: "Sportsbet also pursued a claim against the State of NSW that the Act & Regulations authorising the imposition of the impost, which takes the form of a fee, were invalid. In fact, the fee was not authorised by those enactments. The unlawful conduct occurred at the level of its imposition by Racing NSW & not at the level of the legislation. The claim against the State of NSW is, therefore, to be dismissed." As a result, Justice Perram effectively found it was permissible to impose a "race fields" fee, but the threshold for NSW operators & rebating to Tabcorp discriminated against other operators.

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