Sportsbet heading to court

[Dogwatcher]

Sportsbet Forced To Act Against Secret Deals & Unlawful Racing Taxes Thursday 27th September 2007

Sportsbet, Australia's leading corporate bookmaker licensed and based in the Northern Territory launched a legal challenge on Monday against Racing Victoria Ltd (RVL), all of RVL's Board members, Harness Racing Victoria (HRV), Greyhound Racing Victoria (GRV) and the State of Victoria. The legal action challenges the enforceability of recently amended Victorian legislation and the taxes that racing bodies have attached to new racefield authorisation powers.

Sportsbet disputes the validity of the taxation approach taken by Victoria's racing bodies and is filing suit to ensure that there is transparency in dealings with Victoria's racing bodies, and fairness and legality in the application of taxes.

In November 2005, the Gaming Regulation Act 2003 (Vic) was amended, giving Victorian racing bodies the power to authorise publication of racefields, that is, the names and numbers of horses or greyhounds. This was an attempt by the Victorian Government to hand control of the publication of racefields to each of Victoria's racing bodies to enable them to authorise certain bookmakers to use a racefield. Without such approval, an interstate bookmaker was arguably guilty of a criminal offence. The racefield data is, of course, freely available to the public.

RVL and HRV have taken this amendment a step too far, applying an 'economic contribution' policy which began in September 2006. This means that, despite meeting probity and integrity concerns, RVL and HRV will not approve a bookmaker to operate until the bookmaker has agreed to volunteer to pay an economic contribution equal to 1% of turnover on their racing products.

Sportsbet's Chief Executive Officer, Matthew Tripp, said that "Sportsbet had been forced to act against RVL and its Victorian counterparts because of the failure by the racing bodies to provide a level playing field and their inability to lawfully institute a tax, particularly across state borders."

Victorian legislation discriminates against interstate trade, commerce and intercourse, which is a direct violation of the Constitution of Australia, and is inconsistent with Australia as a free trade zone, as required by the Constitution.

RVL's most recent indiscretion involved the offering of a reduced turnover tax rate of 0.73%, down from 1%, to those operators who chose to waive their rights to sue RVL to recover the funds at any stage in the future. Mr Tripp noted that "This clearly indicates RVL's reluctance to have this legislation challenged, and is no way for an self-styled quasi regulator to act, particularly an organisation purporting to uphold and police integrity matters in the Victorian thoroughbred racing industry."

Sportsbet has, to date, fully complied with the request of RVL to pay all taxes. Sportsbet has since 1993 paid extensive racing and sporting taxes to its Northern Territory regulator, in addition to its territory and federal taxation obligations as an Australian company.

"RVL is meant to provide a level playing field where all operators, domestically and internationally are treated fairly and consistently. We do not believe that to be the case. If a tax is to be imposed, all operators must pay it without exception in an unbiased and uniform basis. This has not been the case, and we are aware that many operators, particularly offshore operators, are not paying any taxes at all, and those domestic operators that are paying taxes are not being treated consistently by RVL with secret deals and special rates for mates. We are very concerned about many aspects of RVL's policy. It reflects poorly on Victoria as a reputable wagering jurisdiction." said Mr. Tripp.

Mr Tripp stated that "Sportsbet believes that RVL's agenda is heavily influenced by Tabcorp, the formerly state owned Victorian totaliser, a major industry funding partner, as RVL is a party to a major joint venture with Tabcorp through a company VicRacing Pty Ltd. The relationship with Tabcorp compromises RVL and has resulted in RVL compromising its obligations to be independent, fair and equitable, and to act with the highest levels of integrity."

"Sportsbet is a wholly Australian-owned company, with a long established record in bookmaking in Australia. We have always met our legal and licence obligations and are prepared to support racing in Victoria and Australia. In taking this action, we are seeking commercial equity and a level playing field for all corporate bookmakers. We are a frontrunner in the industry and I know that all other corporate bookmakers are watching closely, " said Mr. Tripp.