British betting exchange Betfair is threatening legal action against the Australian racing industry for restraint of trade.

The company, whose Australian partner is Kerry Packer's Publishing and Broadcasting Ltd, launched preliminary legal action against TABs, racing officials and race clubs across the nation on Wednesday, The Daily Telegraph said.

Sydney law firm Gilbert and Tobin, which represents Packer, has taken up the case for Betfair.

The firm was looking into whether elements of the racing industry had shown bias against it and possibly colluded to prevent it operating in Australia, the newspaper said.

Betfair cannot operate legally in Australia until it has a licence.

It is reportedly close to an agreement with the Tasmanian government to operate there, which will open up its operations to other states through internet and telephone betting.

"We have written to representatives of various racing bodies setting out our concerns," Betfair spokesman Mark Davies told the Telegraph.

"This has been precipitated by certain public statements made recently."

Betfair says its attempts to enter the Australian wagering market have been frustrated by opposition from the racing industry.

Gilbert and Tobin spokesman Lawrence Hyde declined to comment.

Brought to you by AAP © 2024 AAP