Wagering on a midweek meeting at Warwick Farm will be 51 per cent more expensive than trading on the Melbourne Cup for Betfair under an imminent race fields fee hike, which the betting exchange claims will drive further wagering on NSW races to offshore operators.
Betfair on Thursday notified members it will increase the commission it charges on winnings on NSW races from eight per cent to 10 per cent – well above the six per cent rate it employs for Victoria and Queensland racing – when Racing NSW's amended race fields policy starts next month.
![Betfair says NSW Racing is its most expensive product in the world.](http://web.archive.org./web/20170622142041im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/w/f/f/j/image.related.articleLeadwide.620x349.gww5gy.png/1498140326786.jpg)
The exchange claimed thoroughbred racing in NSW is the most expensive product Betfair offers anywhere in the world, reluctantly agreeing to pass on the costs to its clients.
It will trigger the exchange – and potentially other corporate bookmakers – to drastically scale back its promotion of NSW racing given the diminished returns.
​Racing NSW announced in May it would lift its standard fees from 1.5 to two per cent for all wagers on NSW races from July 1.
The move has triggered criticism from some wagering operators, not least the betting exchange who have forecast an 18 per cent dip in Racing NSW turnover in the next financial year.
It described the projection as a "disappointing result for Betfair, Racing NSW and industry participants".
"The commission increase and turnover charge changes on NSW thoroughbred racing has not been a decision that Betfair has taken lightly," Betfair chief executive Tim Moore-Barton said.
"However, such is the magnitude of the uplift in fees it was unfortunately the only course of action available to us."
"Betfair has never refused to pay product fees to Australian racing codes and we are proud of our contributions to the Australian racing industry. This includes over $20 million to Racing NSW over the last five years.
"However, there needs to be a balance between contributions to industry and ensuring that punters receive value for money. If this is not achieved, punters will continue to shift their wagering dollar to offshore betting operators, who pay no race field fees and are an integrity blind spot for racing stewards."
But Racing NSW chief executive Peter V'landys claimed he would not short change the industry and questioned the exchange's business model.
"They base their business model on paying too little for the product," V'landys said. "It's like the removalist who budgets for petrol to cost him 50 cents per litre if it's going to cost him $1.10 per litre. They should have allowed for the cost of the product which they haven't done. We're not going to sell our product cheaply.
"We treat every wagering operator the same no matter their business model, whether it's a low margin or high margin. At the end of the day trainers, owners, jockeys and stablehands aren't going to reduce their fees for Betfair."
Betfair's influence over the marketplace has only grown since its arrival in Australia and it is seen as a key contributor in shaping books, while arming integrity officials with another tool to monitor suspicious betting activity.
But they allege from next month 56 per cent of any revenue they generate on NSW thoroughbred racing, even before taxes and operating costs, will be paid to the state's regulatory body.
It also predicts 74 per cent of revenue it will collect from services it offers for the Golden Slipper program, classified as a premier meeting and subject to a higher threshold, will be returned as a race fields fee.
Only 35 per cent of its revenue on the Melbourne Cup is paid as a product fee.
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