Betfair Pty Ltd v Western Australia

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HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, KIRBY, HAYNE, HEYDON, CRENNAN AND KIEFEL JJ

BETFAIR PTY LIMITED & ANOR PLAINTIFFS

AND

STATE OF WESTERN AUSTRALIA  DEFENDANT

Betfair Pty Limited v Western Australia [2008] HCA 11
27 March 2008
C2/2007

ORDER

1.The questions reserved in the amended special case dated 7 June 2007 be answered as follows:

Question One

Is s 24(1aa) of the Betting Control Act 1954 (WA) invalid either:

(a)      wholly; or

(b)to the extent that s 24(1aa) would apply to a person, including the second plaintiff, who makes or accepts offers to bet through the use of the first plaintiff's betting exchange, by telephone or internet communication between a place in Western Australia and the Tasmanian premises,

by reason of s 92 of the Constitution?

Answer

Section 24(1aa) of the Betting Control Act 1954 (WA) is invalid to the extent that it would apply to a person including the second plaintiff, who makes or accepts offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between a place in Western Australia and the Tasmanian premises of the first plaintiff.

Question Two

Is s 27D(1) of the Betting Control Act 1954 (WA) invalid either:

(a)      wholly; or

(b)to the extent that s 27D(1) would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field:

(i)by way of telephone or internet communication between the Tasmanian premises and a place in another State; or

(ii)for the purpose of making or receiving offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between the Tasmanian premises and a place in another State,

by reason of s 92 of the Constitution?

Answer

Section 27D(1) of the Betting Control Act 1954 (WA) is invalid to the extent that it would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field:

(a)by way of telephone or internet communication between the Tasmanian premises of the first plaintiff and a place in another State; or

(b)for the purpose of making or receiving offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between the Tasmanian premises of the first plaintiff and a place in another State.

Question Three

Is s 27D(1) of the Betting Control Act 1954 (WA) invalid or inoperative either:

(a)      wholly; or

(b)to the extent that s 27D(1) would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field in:

(i)       Tasmania;

(ii)      Western Australia; or

(iii)     elsewhere,

by reason of s 118 of the Constitution or otherwise under the Constitution?

Answer

Unnecessary to answer.

2.The costs of the plaintiffs of the amended special case be borne by the defendant.

Representation

S J Gageler SC with K C Morgan for the plaintiffs (instructed by Gilbert & Tobin)

R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell…

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Details
Case
[2008] HCA 11
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered the validity of provisions of Western Australia's *Betting Control Act 1954* (WA) in *Betfair Pty Ltd v Western Australia*. The plaintiffs, Betfair Pty Ltd, a licensed betting exchange operator in Tasmania, and a second plaintiff who used Betfair's services to bet on Western Australian races, challenged sections 24(1aa) and 27D(1) of the WA Act. These sections criminalised betting through a betting exchange and the unauthorised publication of Western Australian race fields, respectively.

The central legal issue before the High Court was whether these provisions of the WA Act were invalid by reason of section 92 of the Australian Constitution, which guarantees freedom of interstate trade, commerce, and intercourse. Specifically, the Court had to determine if the impugned sections imposed an impermissible disadvantage on interstate operators like Betfair compared to Western Australian wagering operators, and if they impermissibly restricted competition in the national market for betting services. The Court also considered the historical context and evolving interpretation of section 92, including its role in creating national markets and eliminating protectionism.

The Court reasoned that section 92 of the Constitution is intended to create national markets and prevent protectionist measures that discriminate against interstate trade. Drawing on historical understanding and contemporary legal principles, the Court applied a criterion of whether the legislation, in its practical effect, imposed a discriminatory burden on interstate commerce that was not justified by reasonable necessity or proportionality. The Court noted that while state legislatures have power to enact laws for the well-being of their citizens, this power is limited when it unduly restricts interstate trade. The Court found that the challenged provisions, by their operation, created barriers to interstate betting and the dissemination of race fields, thereby infringing the freedom guaranteed by section 92.

The High Court answered the questions reserved in the amended special case. It held that section 24(1aa) of the *Betting Control Act 1954* (WA) was invalid to the extent that it applied to a person making or accepting offers to bet through Betfair's betting exchange via telephone or internet communication between Western Australia and Tasmania. Similarly, section 27D(1) of the WA Act was found to be invalid to the extent that it applied to Betfair publishing or making available a Western Australian race field via telephone or internet communication between Tasmania and another state, or for the purpose of facilitating betting exchange operations between Tasmania and another state. The Court ordered that the costs of the plaintiffs in the special case be borne by the defendant.

Orders

Orders of the court

1. The questions reserved in the amended special case dated 7 June 2007 be answered as follows:

Question One:

Is s 24(1aa) of the Betting Control Act 1954 (WA) invalid either:

(a) wholly; or

(b) to the extent that s 24(1aa) would apply to a person, including the second plaintiff, who makes or accepts offers to bet through the use of the first plaintiff's betting exchange, by telephone or internet communication between a place in Western Australia and the Tasmanian premises,

by reason of s 92 of the Constitution?

Answer:

Section 24(1aa) of the Betting Control Act 1954 (WA) is invalid to the extent that it would apply to a person including the second plaintiff, who makes or accepts offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between a place in Western Australia and the Tasmanian premises of the first plaintiff.

Question Two:

Is s 27D(1) of the Betting Control Act 1954 (WA) invalid either:

(a) wholly; or

(b) to the extent that s 27D(1) would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field:

(i) by way of telephone or internet communication between the Tasmanian premises and a place in another State; or

(ii) for the purpose of making or receiving offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between the Tasmanian premises and a place in another State,

by reason of s 92 of the Constitution?

Answer:

Section 27D(1) of the Betting Control Act 1954 (WA) is invalid to the extent that it would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field:

(a) by way of telephone or internet communication between the Tasmanian premises of the first plaintiff and a place in another State; or

(b) for the purpose of making or receiving offers to bet through the use of the first plaintiff's betting exchange by telephone or internet communication between the Tasmanian premises of the first plaintiff and a place in another State.

Question Three:

Is s 27D(1) of the Betting Control Act 1954 (WA) invalid or inoperative either:

(a) wholly; or

(b) to the extent that s 27D(1) would apply to conduct of the first plaintiff in publishing or otherwise making available a WA race field in:

(i) Tasmania;

(ii) Western Australia; or

(iii) elsewhere,

by reason of s 118 of the Constitution or otherwise under the Constitution?

Answer:

Unnecessary to answer.

2. The costs of the plaintiffs of the amended special case be borne by the defendant. (Joint judgment of Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ with Heydon J delivering separate reasons and agreeing with the answers and orders proposed)

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GLEESON CJ, GUMMOW, KIRBY, HAYNE, CRENNAN AND KIEFEL JJ HEYDON J
The domestic aspect of trade and fiscal policy was not dealt with so readily. Looking at the subject of domestic protectionism and the operation of s 92, it may be suggested that the emergence of global institutions, including the International Labour Organisation (1919), the General Agreement on Tariffs and Trade (1947) and the World Trade Organisation (1995), some of which appear to be premised on the economic value of "free trade", is a development which properly fuels "an implicit assumption that anti‑protectionist rules in national legal systems share that same normative foundation"[41]. However, domestic political pressures in the Australian colonies and the Imperial context in which the colonies conducted their affairs meant that more was involved in the formulation of s 92.[41]Simpson, "Grounding the High Court's Modern Section 92 Jurisprudence: The Case for Improper Purpose as the Touchstone", (2005) 33 Federal Law Review 445 at 463.The relevance of the United States decisions Counsel for the plaintiffs properly emphasised that assistance in framing s 92 was derived from the contemporary law in the United States. That country after 1890 pursued a protectionist policy as regards foreign trade, in contrast to the position of the United Kingdom[42], where the protection of domestic industry from foreign competition was seen as defiance of the laws of political economy. However, within the United States the "negative Commerce Clause" had been developed by the Supreme Court to support an exclusive federal legislative power and to foster a national economy rather than an economy comprising markets constrained by legislation based upon the geographical limits of the States.[42]Ensor, England 1870‑1914, (1936) at 276. That development had been in response to an apparent, albeit at times inconvenient, truth. This is that legislators in one political subdivision, such as the States, may be susceptible to pressures which encourage decisions adverse to the commercial and other interests of those who are not their constituents and not their taxpayers. Professor Tribe, writing on the Commerce Clause in the United States Constitution, has remarked[43]:[43]American Constitutional Law, 3rd ed, vol 1 (2000) at 1051‑1052 (footnotes omitted)."That recognition reflects not a cynical view of the failings of statesmanship at a sub‑federal level, but only an understanding that the proper structural role of state lawmakers is to protect and promote the interests of their own constituents. That role is one that they will inevitably try to fulfill even at the expense of citizens of other states.In this context, the rhetoric of judicial deference to the democratically fashioned judgments of legislatures is often inapposite. The checks on which we rely to curb the abuse of legislative power – election and recall – are simply unavailable to those who have no effective voice or vote in the jurisdiction which harms them. This problem is most acute when a state enacts commercial laws that regulate extraterritorial trade, so that unrepresented outsiders are affected even if they do not cross the state's borders."The thought expressed here had been captured in the statement by Cardozo J in the United States Supreme Court in Baldwin v G A F Seelig, Inc[44]:"The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division."Earlier in those reasons, and in a passage upon which the present plaintiffs rely, Cardozo J said of the New York law which was successfully challenged in Baldwin[45]:"New York asserts her power to outlaw milk so introduced by prohibiting its sale thereafter if the price that has been paid for it to the farmers of Vermont is less than would be owing in like circumstances to farmers in New York. The importer in that view may keep his milk or drink it, but sell it he may not.Such a power, if exerted, will set a barrier to traffic between one state and another as effective as if customs duties, equal to the price differential, had been laid upon the thing transported."[44]294 US 511 at 523 (1935).[45]294 US 511 at 521 (1935).

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GUMMOW, KIRBY, HAYNE, CRENNAN AND KIEFEL JJ, HEYDON J

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