Queensland’s approach to Racefields Decision

MEDIA RELEASE, RACING QUEENSLAND LIMITED, QLD: On Wednesday, November 17, 2010 the Federal Court of Australia determined two appeals in relation to Racefields Legislation matters. Both decisions should be considered positive outcomes for the Australian racing industry in its pursuit of obtaining a fair fee for the use of its information by wagering operators. Both Betfair Pty Ltd and Ladbrokes.com.au Pty Ltd are likely to be considering whether to seek leave of the High Court to appeal. Leave must be sought within 28 days.

Since Wednesday’s Full Court decisions, some industry participants have been vocal, suggesting that State jurisdictions using a gross profit model should amend their approach to a turnover-based model.

Racing Queensland Limited (RQL) CEO, Mr Malcolm Tuttle, states Queensland’s approach. “For thoroughbred racing specifically, the then Principal Racing Authority, Queensland Racing Limited (QRL) initially implemented an approach similar to Racing New South Wales in that it charged a racefield fee based on 1.5 per cent of turnover with a fee free threshold of $5 million of turnover.

“Since September 1, 2008, QRL collected fees from some wagering operators but until the current financial year no fees had been paid by corporate bookmakers.

“During September 2010, the current control body, namely RQL, entered into agreements with several corporate bookmakers based on a gross profit approach.

“In the same month, RQL also amended its fee approach across the board to reflect 10 per cent of gross profit for wagering operators with a premium of 15 per cent payable during the months of May and June.

“Whilst the Board of RQL was aware of the pending appeals in New South Wales, it was also aware of the high level of uncertainty that had existed around the lawful application and implementation of racefield fees. Even now, the parties aggrieved by Wednesday’s decision may seek leave to appeal to a higher court.

“An expectation exists within the Queensland racing industry that a change from the current charging framework of 10 per cent of gross profit with a 15 per cent premium charged in May and June, back to the pre-existing turnover based approach would lead to a significant increase in the revenue that flows to RQL. This is simply not the case.”

Over eighty five percent (85%) of revenue on a gross profit model is received from parimutuel wagering operators, and on a 10 per cent gross profit model, these operators pay a higher percentage of turnover than 1.5 per cent.

Further financial modelling for the future will be undertaken and presented to the RQL Board in due course.

For further information please contact Racing Queensland Limited