THE NSW Government will tighten its racing laws after a Supreme Court ruling that exempted the powerful Waterhouse family from fees that apply to bookmakers and totaliser agencies.

Bookmakers Tom Waterhouse and his grandfather, Bill, won round one of a battle against Racing NSW yesterday, with a judge deciding that new laws should not apply to their telephone betting agency.

The laws, which are designed to raise revenue for the racing industry, require any organisation that publishes race information to get approval from Racing NSW and become subject to fees in return.

Racing NSW will charge the agencies 1.5 per cent of their turnover under the new regime, which came into effect this month.

But the Waterhouses won a reprieve from the millions of dollars in fees the laws would have cost their business, arguing their business did not strictly "publish" any race information because its clients knew which horses were running before they placed bets.

The Minister for Gaming and Racing, Kevin Greene, said the Government would move swiftly to tweak the laws so the Waterhouse family would be subject to the same fees.

"It's very important to recognise what this legislation aims to do," Mr Greene said. "We introduced these laws to capture the wagering operators who profit from the use of NSW race fields without contributing anything to the cost of staging those races.

"The NSW Government will now move quickly to … correct the technicalities identified in the Supreme Court."

Justice George Palmer said in his judgment the laws as they stood did not require telephone or online betting agencies to register with Racing NSW.

If the term "publish" could be applied to the Waterhouse staff confirming with telephone betters which horses they planned to back, then it could also apply to small-time punters discussing the merits of particular horses, Justice Palmer said.

Tom Waterhouse said his family would deal with any further changes the Government made to the laws if they arose. "I want to make it clear I'm happy to pay tax but the 50 per cent increase would have changed my business and made on-course betting even less relevant," he said in a statement.

His lawyer, Clive Jeffreys, said the object of the laws was to tax bookmakers and totaliser agencies that were not paying any turnover tax, but the Waterhouses were already doing so.