Impact of full Federal Court Ruling on Race Fields Fees for Greyhound Racing in NSW

MEDIA RELEASE, Greyhound Racing NSW: Following the recent ruling in favour of Racing NSW by the Australian Federal Court in the race fields cases brought by Betfair and Sportsbet, many participants and supporters have asked Greyhound Racing NSW (“GRNSW’) how these decisions affect greyhound racing. This fact sheet is intended to address the most common questions asked.

How do the Federal Court rulings in the Sportsbet and Betfair cases impact on greyhound racing in NSW?

Whilst GRNSW was not a party to either case and the judgments do not bind GRNSW, there are two important positive implications:

  • Firstly, the decisions endorse the validity of the race fields legislation and the right of GRNSW to impose a fee on wagering operators for the use of NSW greyhound race field information. This provides a degree of certainty in the charging of fees in the future.
  • Secondly, a Deed of Release entered into by the three racing codes with TAB Limited regarding a dispute over payments under the Racing Distribution Agreement in 2009 did not result in Sportsbet’s Approval from Racing NSW and Harness Racing NSW being invalidated.

There are no negative implications for the GRNSW approval process.

How does GRNSW charge race fields fees?

GRNSW charges all Australian wagering operators fielding on NSW greyhound races a fee that is the lesser of 1.5% of turnover and 10% of gross margin. Gross margin can be simply understood as a wagering operator’s sales on a particular race less punter winnings on that same race.

The inclusion of a turnover element in the calculation is necessary as the race fields legislation places a cap on the fees that GRNSW can charge – that cap is 1.5% of turnover.

GRNSW has approached the State Government to amend the legislation so as to remove the cap that applies to race fields fees collected by GRNSW or to include in the cap a measure of gross margin. This would also allow GRNSW to consider imposing higher fees. The Government is yet to commit to such an amendment.

Wouldn’t greyhound racing receive more money by charging fees based on 1.5% of turnover as opposed to a fee based on gross margin?

The simple answer to this question is no.

Last financial year (2009/10) wagering turnover of all Australian based wagering operators on NSW greyhound races was $820,598,604. The combined gross margin of all such operators betting on NSW greyhound races was $124,203,197. As illustrated in the table below, a fee based on 10% of gross margin would have returned a higher level of fees to the sport in 2009/10 than a fee based on 1.5% of turnover.

Table 1: Notional Returns to NSW greyhound racing in 2009/10 from Australian Wagering Operators under different fee models

1.5% of Turnover 10% of Gross Margin 15% of Gross Margin 20% of Gross Margin
$12,308,979 $12,420,320 $18,630,480 $24,840,639

This position is consistent with the first quarter of the current financial year where the combined wagering turnover of all Australian wagering operators on NSW greyhound races was $245,996,603 and the combined gross margin of all such operators betting on NSW greyhounds was $37,133,174.

Table 2: Notional Returns to NSW greyhound racing in 1st Quarter 2010/11 from Australian Wagering Operators under different fee models

1.5% of Turnover 10% of Gross Margin 15% of Gross Margin 20% of Gross Margin
$3,689,949 $3,713,317 $5,569,976 $7,426,635

Will GRNSW change the method by which it levies race fields fees?

The current Race Field Information Use Approvals issued to all Australian wagering operators by GRNSW expire on 30 June 2011.

In line with its established practice, GRNSW will review all of its Race Field Information Use Approval Conditions, including those relating to fees, prior to issuing Approvals for the period starting 1 July 2011. That review will take account of both legal and commercial considerations relevant to ensuring the best possible outcome for greyhound racing.

Further Media Information: GRNSW Communications Manager Adam Pengilly 8767 0517 or 0401 641 943

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