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Emily D. Swoboda

Insights: Western Australia

4 April 2008

Betfair last week won a High Court challenge in Western Australia, allowing the exchange betting operator to resume operations in the state. In its decision, the court invalidated a Western Australian statute banning betting exchanges from offering bets to the state's punters.

Betfair will resume taking bets from West Australian residents on Saturday and has repeatedly said it has no intention of undermining the state's racing industry, but industry members have argued deregulation risks future funding of racing.

IGN asked the experts what impact the decision could have on the Western Australian racing industry now that punters can place Internet and telephone bets with Betfair's exchange in Tasmania -- without the threat of hefty fines.

Andrew Twaits: We covered Western Australian races for three years without any negative effect. That won't change when we resume coverage of their racing on Saturday. If anything, the evidence is showing that we're having a positive impact on the Australian racing industry.

Mr. Twaits is the director of business and corporate affairs for Betfair Australia.

MP John Edwin McGrath: As I am aware, Betfair won't be paying a fee to the Western Australian racing industry because, under their license agreement, they pay Tasmania.

And under a gentlemen's agreement in Australia the various states don't have to pay other jurisdictions for the right to bet on their product (e.g. the Western Australia TAB does not pay a fee to bet on Melbourne or Sydney races).

But Betfair has agreed to provide Western Australian racing stewards with information of all bets recorded on Perth races.

With regard to Betfair's impact on the Western Australia TAB, I think at first it will be minimal. Betfair caters for a niche market and the average Aussie punter prefers to bet with the TAB or at the track.

Betting on the Internet is time consuming. But Betfair will attract some big players, including bookmakers, who might use it to lay off.

The industry, now that it has lost the court case, is hoping that some money bet through Betfair will eventually make its way back to the TAB anyway.

Mr. McGrath is the Liberal Party MP for South Perth serving the role of opposition spokesperson seniors, racing and gaming, and liquor licensing in Western Australia.

Jamie Nettleton: The people who bet with Betfair mean they aren't betting with RWWA, which is the betting operator in Western Australia. So, it's a loss of revenue for them and therefore a loss of revenue for the racing industry.

Secondly, insofar as they're betting on race fields, there's certainly no legal obligation on Betfair to pay a percentage back to the Western Australian race industry.

So, in one sense, it's a question mark of whether those people making those bets are people who would have otherwise gone to another operator, or whether it's new business. But insofar as people who would have gone elsewhere, it's a loss of revenue for Western Australia.

In one sense, by having their race field posted on Betfair, they're getting more publicity and perhaps that's a way of people becoming more aware of the benefits of doing things in Western Australia.

Mr. Nettleton is a partner at Addisons law firm in Sydney. He specializes in gambling and intellectual property law and has extensive sports law expertise, having advised on all legal issues relating to sporting associations, as well as major sporting events, for many years. Currently, he is assisting the Australian Sports Commission in ensuring corporate governance compliance by national sporting organizations. He is the ex-chair of the Sports and Gaming Committee of the International Bar Association and a member of the International Masters of Gaming Law.

Insights: Western Australia is republished from
Emily D. Swoboda
Emily D. Swoboda