Whenever there is an orchestrated PR campaign with Racing NSW in the middle of it, one can be almost certain that there is a fair amount of bullshit in the air.

The most recent tirade against non-TAB operators, started by Racing NSW, picked up by Bob Bentley as Chairman of the Australian Racing Board and then re-iterated today by a Board report of Racing NSW obviously fits someone's agenda.

Two basic points come through from the various media releases being parroted by most of the racing media without any thought as to why they are repeating such rubbish.

Firstly that racing as we know it is under serious threat from those terrible corporate bookmakers and Betfair who have the temerity to challenge in Court regulations made by Racing NSW which they don't agree with.

Secondly, because of the ability of these parties to challenge discriminatory laws and regulations made by the states, Bentley wants the Federal government to step in with laws in favour of the TAB's which can't be challenged on that basis.

Racing NSW has raised the threat of prizemoney reductions of 20% because the corporates and Betfair may win their cases and therefore require it to hand back the $30 million or so it has collected.

Missing from Racing NSW's rhetoric is any condemnation of TabCorp, who are also arguing about paying an additional 1.5% of turnover. TabCorp's most recent report to the Stock Exchange states that payments to the NSW racing industry are up by 18.3% in the 6 months to December.

Gerard Daffy from SportsAlive.com wonders how that increase could have occurred if TabCorp is suffering so much from competitive pressures.

It is unclear whether this increase includes the additional 1.5% race fields levy, but one thing we are certain of is that TabCorp is disputing the requirement to pay it.

Do we hear any complaint about this from Racing NSW? Of course not.

My own opinion is that it was never expected that TabCorp would pay the extra amount. It just suits Racing NSW to claim that TabCorp is paying and then when eventually they don't, nothing will be said about it.

If TabCorp did pay what would effectively be a 30% increase in their contribution to Racing NSW, it would solve their funding shortfall in one fell swoop.

What is certainly driving much of Racing NSW's public posturing is the fact that its defence of Betfair's Federal Court claim against the race fields levy of 1.5% of turnover is faltering badly.

Late last week, the latest order in favour of Betfair was issued by Judge Perram.

In it Perram struck down Racing NSW's application to allow discovery of some 60,000 Betfair documents relating to its business strategy and methods.

Perram concluded that because Betfair's case against Racing NSW alleged a breach of the Constitution, none of the documents sought would be likely to increase Racing NSW's chances of success.

In fact, while the application was being argued, Perram challenged Racing NSW's legal team to identify the best "smoking gun" document of Betfair's that they could wish for which would assist their defence to Betfair's claim. It couldn't - at least not to Perram's satisfaction.

On the contrary, Betfair succeeded in demanding virtually all of the categories of documents that it wanted discovered from Racing NSW. These documents could well demonstrate that Racing NSW set out to discriminate against Betfair when formulating its turnover based race field levy.

Racing NSW's legal team demonstrated how weak their client's defence was likely to be when it told the judge that the reason it wanted documents about Betfair's business model was that they would show that Betfair underestimated the cost of a turnover based race fields levy on its profitability.

To their chagrin, Betfair's counsel pointed out to the judge that Betfair's business model pre-dated the NSW legislation by two years. How could Betfair possibly have planned their business on the basis of legislation that didn't exist?

More importantly, in my opinion NSW put together its legislation with full knowledge of how Betfair operated. Racing NSW formulated its regulations with the same level of understanding and did not consult with Betfair and the other corporates in spite of its governing Act of Parliament which required it to act in the interest of the wider community including hundreds of thousands of punters, rather than just the few thousand racing industry participants.

Costs were awarded against Racing NSW yet again, meaning that it has not won even a minor skirmish in this case.

Racing NSW says :-

"Although Racing NSW is confident of successfully defending these challenges, it has to date been reluctant to release funds because if, in the unlikely event that Racing NSW were to lose the case, all race field funds collected would need to be refunded."

Alan Brown, the Chairman of Racing NSW is a very experienced lawyer. Blind Freddy can see that they are comprehensively losing this case.

Contrast the NSW situation with that of Victoria which has struck voluntary agreements with Betfair and the corporates based on their preferred gross profit model. Funds are pouring into Victoria from these arrangements, coupled with lucrative sponsorship deals as the corporates fight with TabCorp and each other for the attention of punters.

Having torn up the gentlemen's agreement which allowed the NSW TAB to bet on Victorian races without paying any money to Victoria, Racing NSW is now faced with a requirement to pay more money to Victoria then it receives in return.

Fresh from a recent prizemoney increase, the rumour is that Victorian stakes will shortly rise again on the back of this extra revenue, combined with stringent cost control from Racing Victoria.

A reduction in NSW prizemoney can only mean that the best horses in the country will migrate south to race, further strengthening the Victorian product compared to its NSW competitor.

Racing NSW's only saviour now is the Federal government, which has consistently demonstrated little interest in saving the racing industry from its own incompetence.

Why that attitude will change now is a mystery to me, but that will not prevent the Luddites from trying to turn back time.

The fact that Racing Victoria has demonstrated that a pragmatic, negotiated, non-legal approach can work is the best indication that the other states have it all wrong.

Cyberhorse 2019 Bill Saunders Published 27/05/09