In marked contrast to the fanfare with which Racing NSW announced a minor win in Betfair's Federal Court case against it, major changes to its conditions for using race fields have been flagged with no public announcement.

The reason is obvious - Racing NSW expects to lose the cases brought against it by Betfair and Sportsbet, but does not want them to know just yet.

That is why the race field condition changes, which extend the document from 22 to 50 pages, were quietly released to a selected few wagering providers a few days ago, but Betfair and Sportsbet both know nothing about them.

What's changed?

The new conditions, which can be viewed online here, repeat all of those requiring a race field levy of 1.5% of turnover under the legislation and then add to that a requirement to pay 3% as a copyright fee.

One would have thought that such a major change to the requirements for all wagering operators (including TabCorp) to pay fees to Racing NSW would be trumpeted from the rooftops.

However the Racing NSW spin machine, unconvincing at the best of times, will be working overtime to put the right gloss on this announcement.

Let's interpret it for you.

Firstly, the addition of the new 3% copyright fee is clearly in anticipation of losing the Federal Court cases. Even Racing NSW cannot seriously expect all wagering operators to pay it 4.5% of turnover.

This explains why it does not want Betfair and Sportsbet to know. By sending letters to New South Wales operators and putting the new conditions up on its web site, Racing NSW can technically claim that they are in the public domain.

However their sneaky way of going about it, especially in not informing interstate operators of a change mooted for the 1st of October, is hardly professional behaviour.

Secondly, the timing is significant.

Racing NSW has bundled the new copyright agreement as a schedule in addition to the existing race fields conditions agreement that wagering operators are required to sign annually. Wagering operators have only committed to that agreement because they would be risking a criminal conviction under the race fields law if they do not do so.

In November, when the race fields law is likely to be struck down by the Federal Court, there will be no compulsion on any wagering operator to sign the copyright agreement.

So Racing NSW in another sneaky move, has decided to make wagering operators sign up to the non-compulsory copyright agreement as a necessary element of the presently compulsory race field agreement.

There is a legal principle called duress, which basically invalidates a contract where one party is forced to sign. I'm sure that many lawyers will be having a field day with this one.

The third issue here is the extent to which Racing NSW even has copyright in the racing information. If it was so clear and so valuable, one has to ask why the 3% was not claimed years ago instead of the 1.5% finally decided under race fields legislation.

What has changed to replace the compulsion of criminal law with the relatively flaky area of intellectual property law?

It can only be the ineptitude of the execution of the race fields strategy, now in tatters after the Federal Court challenges and TabCorp's "win" in the Victorian Supreme Court, which decided that a formula based calculation was illegal.

Given Racing NSW's incompetence in this area, one has to ask how much better it will fare in the copyright field, especially since the recent ICE TV decision in the High Court which effectively neutralised the Desktop Marketing case upon which Racing NSW had based much of its opinion on copyright.

The British Horseracing Board fought a long and expensive case against bookmaker William Hill on the issue of race field fees a few years ago. After spending £16 million on legal fees (about A$50 million) it was soundly defeated, largely on the basis that most of the information was freely distributed in the public domain.

Racing NSW will be flogging the view that the copyright it claims is worth 3% of turnover to a wagering operator because they use it for wagering purposes.

I hope they are also going to turn their minds to charging punters 3% of their turnover, because they also are using it for wagering purposes. In the copyright field you cannot distinguish between identical uses of intellectual property, by giving it away free to one party while expecting another to pay a hefty fee.

One wonders where TabCorp sits in this new strategy. It is quite clear that TabCorp does not see itself liable to pay the 1.5% race field levy despite the threat of criminal prosecution. It does not seem either that its access to race fields has been denied.

Come the 1st of October, will we see TabCorp dutifully lining up to pay its 3% copyright fee as well?

I somehow think not.

Cyberhorse 2024 Bill Saunders Published 05/09/09