Victoria Considers Introducing a Wagering Tax Similar to South Australia
The Andrews government will be closely monitoring the results of the new wagering tax that is being implemented in South Australia after estimates suggest that the state of Victoria could raise $150 million through a similar tax.
South Australia will begin implementing the 15 percent point-of-consumption tax from the beginning of July, 2017. The South Australian government has estimated that the tax will raise $30 million for the state.
However, bookmakers have come out strongly against what they are referring to as a “punter’s tax”. In an analysis of the potential impact the wagering tax will have on Australian wagering giant Tabcorp, Credit Suisse showed that if Victoria imposed a 10 percent tax, it could raise $140 million in taxes with the cost to Tabcorp increasing by $30 million and the remaining burden lying with corporate bookmakers.
The analysis suggested that if implemented across Australia, “it would just about wipe out all bookmakers’ EBITDA (earnings before interest, tax, depreciation and amortisation) in Australia.” On the other hand, the analysis pointed out that when implemented in the UK in 2014, profits were reduced for some bookmakers, but none went into the red.
At the moment, Tabcorp, Tatts Group and WA Racing are contributing around $289 million, nearly 100 percent of Australia’s wagering taxes through their retail betting licenses, although they command only a 71 percent share of the market. On the other hand, corporate bookmakers who are licensed in the Northern Territory, together pay less than $10 million in state taxes.
David Attenborough, chief executive of Tabcorp welcomed the success of the South Australian government in implementing the taxes and said that while the federal government is finalising changes to the Interactive Gambling Act, “we encourage other state and territory governments to consider similar models.”
March 30, 2017