Victoria, NSW in Advertising Turnabout

A slew of legal challenges in Australia have forced the repeal of archaic laws banning bookmakers from advertising in the Australian states of Victoria and New South Wales.

Rob Hulls, Victoria's deputy premier and minister for racing, and Kevin Greene, the New South Wales minister for racing and gaming, said in a prepared statement today that the two states would amend their respective laws to allow cross-border advertising by commercial bookmakers.

Betfair, an international online betting exchange licensed in Tasmania, forged a legal path in Australia's High Court in June 2007 by challenging Western Australia's ban on betting exchanges.

In March 2008, Betfair won the High Court ruling, which invalidated the state's law and left the New South Wales government vulnerable, facing exactly the situation it faces now -- and Mr. Greene admitted as much.

"A recent High Court decision raised constitutional issues in relation to laws prohibiting interstate wagering operators from advertising in many Australian states," Mr. Greene said in a statement.

Betfair is also in the midst of a Supreme Court case filed jointly with Sportingbet against the New South Wales government over its advertising restrictions.

In June, Sportsbet, an online sports book in the Northern Territory, also filed suit at the Supreme Court against the New South Wales government challenging the state's advertising ban.

Jamie Nettleton, a partner with Addisons Lawyers in Sydney, said governments of Victoria and New South Wales essentially have no choice but to change their laws.

"It follows on the Betfair case in the High Court and is the natural progression from that, and it's undoubtedly being pushed by the Betfair-Sportingbet suit against New South Wales and Victoria, which is ongoing," Mr. Nettleton said.

Along with loosened restrictions comes advertising protocols, according to the announcement. Mr. Greene said any Australian provider would have to meet high standards when promoting their services.

Mr. Nettleton suspects the two governments will want to develop an advertising code, much like the one implemented by the United Kingdom when the Gambling Act 2005 took effect in September 2007.

Amendments to New South Wales' advertising legislation are expected to take effect in 2009 and Mr. Greene said that overseas operators will not be allowed to promote their products. Mr. Nettleton suggested, however, that the question remains as to how enforceable those restrictions will be against the bookmakers themselves.

"They're more likely to be enforceable against advertisers: newspapers, I.S.P.s -- whatever," he said.

Victoria's advertising legislation, meanwhile, is thought to protect revenue from Tabcorp, the monopoly totalizator operator.

But now, Tabcorp, whose monopoly is coming to an end and is going through the process of re-granting its license, is quietly questioning what will happen to the value of bookmaking licenses granted in the state, Mr. Nettleton said.

Mr. Nettleton said Tabcorp has concerns over increasing competition and its effect on license value, as lower value means less money for the government and, by extension, the racing industry.

Commercial bookmakers, however, do not see matters the same way; they claim racing will be the biggest beneficiary of the change in the laws.

Michael Eskander, chief executive of Betstar, a Northern Territory-based bookmaker, told The Age that advertising is the key to putting money back into the racing industry.

"I've been making a lot of noise about this for a long, long time," Mr. Eskander said. "It's a shame it has taken this long, but now we have the avenue to put more money back into the industry."

While it's still early and the laws have yet to be changed, Mr. Nettleton said the important point about the news is that it demonstrates a complete turnabout by both the Victorian and New South Wales governments.

"They've been extremely active -- more in New South Wales than Victoria -- policing these border advertising restrictions," he said. "The legislation's been in place since 1988 and I've seen folders of letters of demand to stop this type of activity. So, that's the end of it. It really is a change in era."