Reverberations Down Under?

Australia's newest TAB is hoping developments half a world away will give it leverage in negotiating with the Australian Racing Board.

AusTOTE of Norfolk Island opened for business against the board's wishes in May 2004, and the conflict has yet to be resolved. At the heart of the issue is AusTOTE's Internet gambling operation, which the board contests is illegal. AusTOTE argues that it can operate legally out of Norfolk Island, an Australian territory with more autonomy than the country's states and other territories, but the ARB has threatened to block the operation. The board is chiefly concerned with AusTOTE's use of information on Australian races, which the board claims is an infringement of intellectual property rights.

Similar charges were filed last year in the European Court of Justice on behalf of the British Horseracing Board against William Hill and other bookmakers that posted information (runners, jockeys, etc.) on English races without paying anything back to the BHB.

William Hill successfully argued that the information wasn't copyrighted material because it could easily be obtained from newspapers and other sources of public domain and because it wasn't a vital part of the BHB's database.

AusTOTE Chief Executive Mike King is hoping that the favorable ruling for William Hill will change attitudes in the ARB toward his company, although it hasn't happened so far.

King said that the Australian racing establishment is considering its position in the wake of the William Hill ruling and even met with corporate bookmakers to discuss the issue (although no agreement on how bookmakers should contribute to the ARB was reached).

"But at least they are talking," King said, although he added, "No one is talking to the newest low-commission Australian totalisator, AusTOTE."

After nearly a year of trying to negotiate with the ARB, AusTOTE has yet to receive a response from the board.

"For nine months we have been systematically attacked, investigated, insulted and threatened with various forms of prosecution by state governments, the Australian Racing Board (ARB) and more recently by the new corporate entity, Racing Industry Services Australia (RISA) and Racing Victoria," King said said.

He added that the attack on AusTOTE has changed direction a number of times. First, he said, the ARB responded by ignoring the company's efforts to open a dialogue, and then the board threatened the operation with legal action. He also said RISA and Racing Victoria have threatened the company with law suits as well.

"Then we find out that the ARB is back on the scene talking turkey with the corporate bookmakers," he said. "I mean, who is responsible for what?"

King said the conflict between the ARB and AusTOTE could have been resolved long ago had the board responded to his company's attempts to negotiate.

"We know that investigations by mainland authorities have shown that AusTOTE is on solid legal ground, and, hence, no legal action has been taken against the organization to this point," King Explained. "We are properly licensed by an Australian government (Norfolk Island) to operate a totalisator service in Australia, and on the question of copyright, we believe our position is strengthened by the decision in William Hill."

King acknowledged that the Australian federal court is not bound by the European Court of Justice's decision, but he's confident that the ruling could be used as precedent in Australia.

"It's hard to see the federal court applying a range of tests different to those applied by the European Court in assessing the substance of copyright claims," King said.

King also restated AusTOTE's commitment to making a contribution to the ARB as a usage fee, but he has received no guidance from the ARB on an appropriate scheme.

AusTOTE has carved out a niche for itself among savvy Australian punters. The operation prides itself on supplying a low-commission product and has dividends higher than any other Australian TAB in 43 percent of the races it offers.

King is realistic about the chances for the issue being resolved soon, but he's still hopeful communications between AusTOTE and the ARB will commence by year's end.