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Racing NSW Chairman Brown Letter To Industry

Monday, 21st June 2010

In Australia, Racing NSW chairman Alan Brown released a "letter to industry participants" in the wake of last week's Federal Court decision on NSW race field legislation. The letter reads: "On Wednesday 16 June, Justice Perram delivered judgment in the Federal Court challenges by Betfair & Sportsbet to the Race Field Legislation & the fees levied under that legislation. Of crucial importance to Racing NSW & the NSW racing industry was that: the Court dismissed Betfair's case on the basis that Betfair had not proved that it was protectionist & therefore unconstitutional to charge a race field fee of 1.5% of turnover; the Court ruled that the Race Fields Legislation is valid; the Court accepted that catching those free riding on the NSW racing industry was a legitimate object the levy. In the case of Sportsbet, the Court found the Race Field Fees charged to Sportsbet (only for the period 1 September 2008 to 30 June 2009) were invalid due to the Judge's interpretation of a commercial settlement reached by the 3 racing codes with Tabcorp (on an element of the Racing Distribution Agreement which was in place since 1997 & well before the Race Field Legislation commenced in 2008) & his view that a $5 million fee-free threshold provided by Racing NSW (to benefit all wagering operators in Australia) protected NSW bookmakers. The judge found both of these actions discriminated against bookmakers in the Northern Territory & were protectionist & therefore unconstitutional. Our legal advice is that those findings are so contrary to the evidence & the law that they should be overturned on appeal. Racing NSW remains committed to the current model of Race Fields Legislation which seeks to obtain a fair return to the NSW racing industry from those who profit from the use of its racing product. This will enable us to then significantly increase prize-money, upgrade race tracks to make them more conducive to competitive racing & provide a better racing surface with less bias making them safer. Importantly, the Court's findings in Sportsbet do not prevent Racing NSW from charging Race Field fees in the future on a turnover basis to all wagering operators. The issues raised by the Judge (which will be the subject of appeal in any event) can be overcome. For example, it will be necessary to remove the $5 million fee-free threshold & all wagering operators (including Sportsbet & other corporate bookmakers) will as a result, have to pay more. Whilst that will have an unfortunate & unwelcome impact on small bookmakers located throughout Australia, it is an inescapable consequence of the Judge's findings. As to the Race Fields Fees (over $50 million) already collected, we are exploring all avenues available to us to ensure we can, as soon as possible, distribute that essential funding to the NSW racing industry participants through prize-money & other initiatives." 

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