Betfair Pty Limited v Racing New South Wales (No 1) [2009] FCA 111

FEDERAL COURT OF AUSTRALIA

Betfair Pty Limited v Racing New South Wales (No 1) [2009] FCA 111

BETFAIR PTY LIMITED v RACING NEW SOUTH WALES, HARNESS RACING NEW SOUTH WALES and ATTORNEY GENERAL FOR THE STATE OF NEW SOUTH WALES

NSD 1566 of 2008

PERRAM J

19 FEBRUARY 2009

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1566 of 2008

BETWEEN: BETFAIR PTY LIMITED

Applicant

AND: RACING NEW SOUTH WALES

First Respondent

HARNESS RACING NEW SOUTH WALES

Second Respondent

ATTORNEY GENERAL FOR NEW SOUTH WALES

Intervener

JUDGE: PERRAM J

DATE OF ORDER: 19 FEBRUARY 2009

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The words 'purports to' be struck out of paragraph 64 of the statement of claim. 2. The balance of the motion be dismissed. 3. The proceeding be listed for further directions at 9.30 am on 24 February 2009. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1566 of 2008

BETWEEN: BETFAIR PTY LIMITED

Applicant

AND: RACING NEW SOUTH WALES

First Respondent

HARNESS RACING NEW SOUTH WALES

Second Respondent

ATTORNEY GENERAL FOR NEW SOUTH WALES

Intervener

JUDGE: PERRAM J

DATE: 19 FEBRUARY 2009

PLACE: SYDNEY

REASONS FOR JUDGMENT

Introduction 1 By an amended notice of motion the respondents, Racing New South Wales ("RNSW") and Harness Racing New South Wales ("HRNSW"), seek to have the applicant ("Betfair") provide further particulars of its statement of claim ("the pleading"). Alternatively, they seek to have portions of the pleading struck out. 2 To understand the issues which arise it is necessary to say something by way of background. Betfair conducts a "betting exchange" from Tasmania under the terms of a licence issued pursuant to the Gaming Control Act 1993 (Tas). The operator of a betting exchange does not take bets or have a stake in the outcome of a future and uncertain event. Instead, such an operator provides a medium whereby gamblers may bet against each other. The operator of such an exchange derives profit not from the betting (in which it is not directly involved) but rather from commission charged on the winnings of successful punters. 3 Betting exchanges are not limited in their operation to the racing of horses. It is, however, only in the context of horse racing that the present issue arises. 4 As a matter of practicality those who wish to offer betting services in relation to horse races need to know which horses are running and in which race. This information is known as race field information. In order for Betfair to operate its betting exchange on horse races run in New South Wales it needs to obtain and publish that information. 5 In New South Wales, however, it is apparently a criminal offence for a "wagering operator" to "use NSW race field information" unless that operator holds an approval to do so or is otherwise authorised by the regulations to do so: s 33 of the Racing Administration Act 1998 (NSW) ("the Act"). Betfair is a "wagering operator". There are a number of unusual features of this law which should not pass without mention. 6 First, the expression "use NSW race field information" is defined in s 32A to include the publication or communication of such information by a person "whether in Australia or elsewhere". Thus the Parliament of New South Wales has created a criminal offence of extra-territorial operation. Its power to do so is undoubted provided there is some nexus with New South Wales which, in this case, is clearly provided both by the racing and the horses themselves: s 2(1) of the Australia Act 1986 (Cth); Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 14. Secondly, the offence is not trivial. For an individual the maximum penalty is 12 months imprisonment or a fine of 50 penalty units ($5,500) for a first offence. Thirdly, an approval issued pursuant to s 33 is granted by a "relevant racing control body" (s 33A), an expression defined in s 27 to mean RNSW, HRNSW or Greyhound Racing New South Wales. 7 RNSW is a body corporate established by s 4 of the Thoroughbred Racing Act 1996 (NSW). Section 5 of that Act provides: Racing NSW does not represent the Crown and is not subject to direction or control by or on behalf of the Government.