Tabcorp, pub establishments, and the anti-gambling lobby in the state of Victoria are preparing for an election-year campaign to try and convince the local Government to boost the tax that applies to online bookmakers, which is currently the lowest one in the country.
Reportedly, gambling companies based in Australia intend to try and pressure Treasurer Tim Pallas to increase the tax that online gambling and sports betting operators such as Sportsbet and Ladbrokes are required to pay. Currently, that tax rate is 10%.
The point-of-consumption tax (POCT) was first unveiled in the state of Victoria three years ago. In 2019, the local Government responded to rising concerns that foreign digital gambling services were effectively avoiding making tax payments in the country.
At first, Victorian authorities set the online gambling tax at 8% only, which was the lowest tax rate of any jurisdiction across the country. A couple of years later, this tax rate was boosted to 10% by the Andrews Government, in line with the tax applicable to digital gambling service providers in New South Wales (NSW), but it remains significantly lower than the one in the ACT, Queensland, Western Australia, and South Australia.
Tabcorp Calls for Fair Point-of-Consumption Tax Burden for All Gambling Operators
Only about a week ago, the Labor Government in Queensland agreed to boost its point-of-consumption tax from 15% to 20% after Tabcorp’s aggressive lobbying. The gambling operator has claimed that it faces a higher tax burden than foreign-owned companies.
The Australian gambling and betting giant has now insisted that the state of Victoria should follow suit in terms of increasing its online gambling tax, as foreign digital rivals have traditionally faced a lower tax burden. CEO Adam Rytenskild said that it was high time for foreign online gambling companies to start paying their fair share of fees and taxes, especially considering the fact that they had increased their share in the local market.
A spokesperson of the Victorian Government commented on the calls, saying that the local authorities’ decisions on the point-of-consumption tax rate would be made in the best interest of the racing sector and the local residents. The local shadow treasurer David Davis has questioned why the Victorian Government would offer a tax break to foreign gambling operators in comparison to other states. He further noted there was legitimate reasoning regarding the competitive neutrality between the tax regimes in different jurisdictions across Australia.
The majority of corporate sports betting operators, including Ladbrokes, Neds, and Sportingbet currently hold a sportsbook operating licence in the Northern Territory of Australia, which traditionally features lower tax rates. They, however, are still operating nationally, which basically means that most of their profits return to their overseas headquarters.
Responsible Wagering Australia (RWA), a lobby group for the online sports betting operators, has strongly opposed the proposed changes to the point-of-consumption tax. After the Queensland Government’s decision to boost the POCT, the lobby group commented that the increase unfairly establish the monopoly of land-based betting service providers at the expense of the newcomers and the emerging online gambling sector.
- Author
Daniel Williams
