Betfair Pty Limited v Racing New South Wales & Ors; Sportsbet v State of New South Wales & Ors

The High Court of Australia considered appeals from decisions of the Supreme Court of New South Wales concerning the validity of certain New South Wales legislation imposing taxes on betting. The appellants, Betfair Pty Limited and Sportsbet, were licensed bookmakers operating in New South Wales. They challenged the legality of the Betting Tax Act 1912 (NSW) and the Racing Legislation Amendment Act 2009 (NSW), which imposed a tax on turnover for betting. The core of the dispute was whether these taxes were invalid as contravening section 92 of the Australian Constitution, which guarantees freedom of interstate and international trade, commerce, and intercourse.

The primary legal issue before the High Court was whether the Betting Tax Act and the Racing Legislation Amendment Act, by imposing a tax on turnover for betting conducted by the appellants, constituted an impermissible burden on interstate and international trade, commerce, and intercourse, thereby contravening section 92 of the Constitution. The appellants argued that the taxes discriminated against interstate and international betting operators and were not reasonably proportionate to the regulatory services provided by the State.

The High Court, by majority, held that the taxes were not invalid under section 92 of the Constitution. The Court reasoned that the taxes were imposed on the turnover of betting conducted within New South Wales, regardless of whether the bettor was located interstate or overseas. The Court applied the principles established in cases such as *Cole v Whitfield* and *Harper v Victoria*, focusing on whether the taxes were discriminatory or protective in their operation. The majority found that the taxes were not discriminatory in a way that would offend section 92, as they applied to all betting turnover within the State and were not designed to favour local operators over interstate or international ones. The Court also considered the proportionality of the tax, finding that it was not so disproportionate to the regulatory costs incurred by the State in overseeing the betting industry as to render it invalid.

The appeals were dismissed.