A groom leads a horse at Turffontein. Bookmakers are required to pay Tellytrack a 3 percent service fee. Photo: Bongiwe Mchunu

Hollywoodbets, a bookmaker with 64 outlets nationally, would defend the lawsuit brought against it by Tellytrack, a company owned by the only two racecourse operators in South Africa, for breaching copyright, its group operating manager, Dermot O’Connell, said on Friday.

He refused to provide the defence to be put forward in the R350 million lawsuit.

Tellytrack provides a live television picture of horse racing in South Africa and Zimbabwe via its own broadcast network on DStv through an agreement with MultiChoice. It is owned by Phumelela Gaming and Leisure and Gold Circle, also known as the totalisator.

Phumelela owns all the racecourses in seven provinces and manages horse racing in an eighth, while Gold Circle owns all the racecourses in KwaZulu-Natal. The court matter arises out of the desire by Phumelela to “level the playing fields” with bookmakers.

The gist of its argument is that bets made at bookmakers divert money that should properly have been made available to the totalisator for the purposes of funding horse racing and bookmakers, therefore, make a disproportionately low contribution towards these costs.

Up to February 1, bookmakers paid R5 500 monthly for each outlet for the Tellytrack service. Since then, Tellytrack has required that bookmakers pay 3 percent of their revenue as a monthly service fee.

Many bookmakers refused to accept this deal, arguing that Phumelela and Gold Circle received 50 percent of betting tax revenue from the provincial gambling boards, which was made up of 6 percent tax on winning bets from bookmakers.

Those bookmakers prepared to pay the service fee were given a new platform, which operates though a decoder.

Phumelela argues: “The sport of horse racing as administered by the two racing operators should be permitted to charge a market-related fee for their intellectual property.”

Unconfirmed reports say bookmakers without the new platform simply “smuggled” their home decoders into their outlets. The channel was available for home subscription.

After being tipped off, Tellytrack successfully applied for search and seizure warrants after using police observer teams at various outlets.

In February, 39 bookmakers in Gauteng and the Gauteng Off-Course Bookmakers’ Association applied for an interdict against Tellytrack, but lost on the basis it was not urgent.

Their case has been set down for October. They have since made a complaint to the Competition Commission.

John Stuart, the chief executive of Tellytrack, and Riaan du Plessis, the chief executive of Phumelela, were not available for comment on Friday.