Supreme Court rejects CrownBet digital deal with ClubsNSW

October 30, 2017 1:38 pm.by Sarah O'Brien

THE Supreme Court has rejected the digital wagering deal between online betting site CrownBet and ClubsNSW.

The Crown Resorts-owned bookmaker announced the ground-breaking deal in February, which would have seen cash out machines rolled out at participating NSW clubs had it been approved.

CrownBet beat Tabcorp, SportsBet and Betting.club for the 10-year tender offered by the representative body of around 1200 licensed clubs. Club owners would have also earned commission for every punter that signed up via the CrownBet app in a participating venue, under the deal.

The partnership was instantly attacked by Tabcorp, with CEO David Attenborough arguing that clubs could be breaching the Unlawful Gambling Act 1998 if they teamed up with the online betting site. Attenborough also penned a letter to venue owners, threatening to pull its services if the clubs teamed up with CrownBet.

“Tabcorp’s position is that it is the only entity that is authorised under NSW wagering legislation to provide wagering services off-course in NSW,” Attenborough said in the letter.

“We believe that the CrownBet arrangement constitutes a form of off-course wagering service and that it is therefore unlawful.”

As a result, CrownBet filed an application with the Supreme Court to refute Attenborough’s claims.

While the Supreme Court rejected the $300 million offer, a CrownBet spokesperson said that the court’s ruling on Friday didn’t state that it was due to the legality of the tie-up.

“However, it refused to exercise its discretion to provide guidance to CrownBet or ClubsNSW,” the spokesman told Fairfax Media.

“We will consider the decision fully before making any further comment.”

CrownBet will now review the reasons behind the court’s decision, which would have benefited the participating venues according to ClubsNSW.

“Our arrangement with CrownBet will ensure NSW clubs get their fair share from digital bets and will help ensure the industry’s long-term viability,” ClubsNSW chief executive, Anthony Ball, said when he announced the deal.

“Small and regional clubs will be the biggest winners.”

According to ClubsNSW, more than 90 percent of its venues lost money on their TAB facilities in recent years, due to people preferring to bet on sports and racing online.

While the court’s decision advising against the partnership could be considered a win for Tabcorp as it currently holds licences to run the only retail betting outlets in these clubs, it’s unclear whether it will impact the outcome of its merger with Tatts.

Tabcorp is awaiting the final decision on whether it can complete the tie-up with Tatts, after the Australian Competition and Consumer Commission (ACCC), as well as CrownBet, appealed the Australian Competition Tribunal’s approval of the merger. The Federal Court in Melbourne approved the appeal, which cited weakened competition concerns, sending the Tabcorp-Tatts merger application back to the Tribunal.

While it’s not clear if CrownBet will ditch the ClubsNSW deal due to the Supreme Court’s decision, it could impact the outcome of the Tabcorp-Tatts merger, which would give the entity retail monopoly in every state and territory in Australia except Western Australia, as it emphasises that the bookmaker is limited to the digital space only.

Such limitations, along with the recent gambling advertising reforms, only perpetuates the likelihood the merged entity would weaken industry competition.