Betfair’s challenge to Western Australian legislation prohibiting the use of betting exchanges began earlier this week. Although the complexity of Betfair’s opening arguments suggests that the case will not be concluded swiftly, its significance means that the High Court’s eventual verdict will be eagerly anticipated by bookmakers throughout Australia.

Australian gaming giant Tabcorp’s plans to offer interactive television betting via Rupert Murdoch’s digital TV service Foxtel have been delayed after gaming regulators in New South Wales said that the new service could not receive regulatory approval before a thorough review of state betting legislation has been concluded.

Just weeks before Betfair’s challenge to the constitutional validity of state legislation banning betting exchanges is due to be heard in the High Court of Australia, the Western Australian government has upped the stakes by rejecting the company’s application for permission to publish information on local horse races.

Further Australian states, including New South Wales, could follow Tasmania in licensing betting exchanges following Betfair’s landmark High Court victory against the government of Western Australia yesterday. The ruling effectively authorizes Betfair to operate and advertise throughout Australia, but the company says it hopes the verdict will allow it to strike agreements with those racing industry interests who fear their funding could be undermined by interstate wagering operations.

Victoria’s gaming and racing lawmakers celebrated Tuesday’s prestigious Melbourne Cup race by announcing a 60 percent cut in state wagering taxes to be implemented within four years. The tax cut comes as a taster of the wholesale reforms in Victorian gambling regulation that will take effect from 2012, which will include a state betting exchange product being introduced under a new wagering licence.

Sweeping plans by the New South Wales government to reform the State’s racing industry will only be partially implemented as legislators rethink their approach to interstate betting operators.

When the Western Australian Government introduced amendments to its Betting Control Act it sought to establish once and for all a regime which would ensure the future of the Western Australian Racing Industry. The High Court confirmed that these amendments were unconstitutional and issued a costs order against the Western Australian Government, the combined effect being a disasterous result for the state and, in some respects, for the racing industries of other Australian states bar Tasmania.

The UK betting exchange Betfair has filed a claim in the High Court of Australia in a last-ditch bid to overturn a law passed last year in Western Australia that prohibits betting exchanges from operating in the state.

The Northern Territory gaming market is dominated by corporate bookmakers who turned over A$4.7bn in 2008/2009 by accessing the broader Australian market via the internet.

Despite the recent release of the Productivity Commission report, the Henry Tax Review and two key judgments from the Federal Court, the new Gillard government seems content to put immediate gambling reform off the agenda with an election looming on August 21, 2010.