Secondly, under the newly inserted s 24(1)aa of the Act, it would be illegal for residents of Western Australia, such as Mr. Erceg, the second plaintiff (the ‘in-state demand’ ), to place a wager through a betting exchange.

[2] Betfair was the only betting operator out of 115 which did not receive ministerial approval under Section 27D, and was therefore prevented from publishing the fields of Western Australian races.

In addition to threatening an industry where Betfair made no contribution, the introduction of a betting exchange, where it was possible to ‘back to lose’, presented a risk that users may attempt to influence the outcome of a race and threaten the integrity of the racing industry.

The High Court held unanimously that the Western Australian government did indeed establish discriminatory burdens of a protectionist kind, and declared the amendments invalid under Section 92 of the Constitution of Australia.

[1] Notably, the judgement distinguished the court's approach to proportionality under the Cole test, arguing that trade-restrictive legislation must be 'reasonably necessary', not justified merely in balancing out a social or economic detriment.