Betfair Pty Ltd v Western Australia and the New Jurisprudence of Section 92

Abstract

Except for an immediate small flurry of cases, section 92 of the Australian Constitution went to sleep for 20 years after the High Court’s ground-breaking decision in Cole v Whitfield in 1988. Then in 2008, this pivotal guarantee of free trade among the states in our 19th century foundational document came into collision with new, 21st century, electronic ways of doing business, to which state geographical boundaries were largely irrelevant — except that it was the states that sought to regulate this business. In Betfair Pty Ltd v Western Australia, a 2008 case involving state regulation of internet gambling, the High Court reminded us of the gospel according to Cole v Whitfield: the states cannot regulate in a way that discriminates against interstate trade so as to confer protectionist benefits on their own intrastate trade. In the age, however, of the new economy, and of national competition law, some commentators have asked whether the national ‘common market’ is adequately fostered by confining section 92 to the prevention of state protectionism. Two further internet gambling cases in 2012 appear to squash any suggestion in the 2008 case that the High Court might stray from the true path of Cole v Whitfield and expand the ambit of section 92 beyond state protectionism — although a possible issue raised by laws that lessen competition without involving state protectionism was left to another day. In the author’s view, section 92 is appropriately confined to the prevention of state protectionism, with broader protection of the common market best left to other mechanisms.