Betfair Pty Limited & Anor v State of WA

Betfair Pty Limited and another party (the applicants) sought declarations and an injunction against the State of Western Australia (the respondent) in the High Court of Australia. The dispute concerned the validity of certain provisions of the Western Australian Racing and Wagering Legislation Amendment Act 2004 (WA) (the Act) and the application of section 117 of the Constitution. The applicants, an online betting exchange operator, challenged the Act's provisions that imposed a betting levy on bets struck on races held in Western Australia, regardless of where the bets were received or the bookmaker was located.

The High Court was required to determine whether the betting levy imposed by the Act discriminated between persons in contravention of section 117 of the Constitution. Specifically, the court had to consider whether the Act's provisions, by taxing bets struck on Western Australian races irrespective of the location of the bettor or bookmaker, constituted a discrimination based on the place of residence or business of the bettor or bookmaker. A further issue was whether the Act's provisions were invalid to the extent that they purported to apply to bets made by persons outside Western Australia.

The majority of the High Court, comprising Gleeson CJ, Gummow, Hayne, Heydon, Crennan and Kiefel JJ, held that the betting levy was discriminatory and therefore invalid under section 117 of the Constitution. Their Honours reasoned that the Act imposed a tax on a transaction (a bet) that was defined by reference to the location of the race, but the liability to pay the levy arose from the location of the bettor or bookmaker. As the Act did not distinguish between residents of Western Australia and non-residents in relation to the imposition of the levy, it effectively discriminated against non-residents who were not subject to the same taxation regime in their home states or territories. The court found that the Act's provisions were not saved by any exception to section 117, such as a tax on property situated within the taxing state.

The High Court made declarations that the relevant provisions of the Act were invalid and permanently restrained the respondent from enforcing them.