Bookmakers face regulatory crackdown in Australia

Business News

Online gambling companies have ramped up their political lobbying efforts in an attempt to stop Victoria from adopting a 15 per cent tax on digital betting that is being rolled out in other states.

Australia’s bookmakers responded angrily last week when Queensland announced it would become the third gaming jurisdiction to roll out a so-called “point-of-consumption” tax.

A 15 per cent point-of-consumption tax – under which the state where a digital bet is placed receives revenue on gambler losses – has already come into force in South Australia, while Western Australia is preparing to follow with its own tax at the same rate from the beginning of next year.

Industry insiders said Australia’s bookmakers were dramatically stepping up efforts to sway government leaders in Victoria, home to the strongest horse-racing jurisdiction in the country, to consider taxing them at a lower rate than 15 per cent.

“Not many bookmakers would even be making a 15 per cent margin on their wagering,” one said.

“The downstream consequences for the wagering industry and consumers is very real, and we think the Victorian government is going to pay more attention than the other states have.”

Corporate bookmakers, who are licensed in the Northern Territory, are making the case that they provide a significant contribution to the national economy through wages, other taxes, the product fees they pay to sporting codes, and lucrative race-field fees paid to the state racing bodies for the use of racing information.

Revenue from race-field fees in Victoria, which are paid by the corporate bookmakers as well as interstate TABs, has been growing substantially year on year. Racing Victoria’s latest annual report shows revenue from race-field fees in the past financial year was $157.5 million.

Supporters of the point-of-consumption tax say it will “level the playing field” for gambling operators, given totalisator providers Tabcorp and Tatts have to pay vastly higher taxes than online corporate bookmakers.

The Stephen Conroy-led industry group Responsible Wagering Australia (RWA), representing Sportsbet, CrownBet, Bet365, Betfair, Ladbrokes and Unibet, called the Queensland decision a “naked tax grab” with no consultation.

The group said it was working with “all jurisdictions” to ensure the new taxes took into account the industry’s “significant contribution to the economy”.

“In the last financial year in Victoria, RWA’s members employed more than 900 people, paid more than $127 million in wages, contributed $78 million to the racing industry and paid more than $11 million in sponsorships to support Victorian events and tourism,” a spokeswoman said.

The online bookmakers’ lobbying in Victoria is focusing on the state Treasurer Tim Pallas. The Andrews government said it was engaging in consultation.

“Like all states, we are looking into this national issue and will consider feedback received as part of an extensive consultation process,” a government spokesman said.

It is also understood that point-of-consumption taxes for online wagering were discussed by state and territory treasurers at the first Board of Treasurers meeting on November 21.

A report from Credit Suisse earlier this year noted that a point-of-consumption tax introduced in England did not reduce wagering revenue when it was implemented in 2014, but the tax slashed industry profit.