South Australia to Impose Place of Consumption Tax on Betting Operators

The South Australia government introduced today a new tax that will be imposed on all betting companies providing their services within the state’s borders. The tax is expected to annually contribute more than A$9.2 million in revenue.

The Place of Consumption tax will be very similar to the Point of Consumption tax that came into effect in the UK late in 2014. The South Australian levy would tax operators at 15% on net wagering revenue. This would be the first time when an Australian state would tax bookmakers on the location of bettors. In most cases, the location of betting operators is what matters when imposing taxes.

Commenting on today’s announcement, South Australia Treasurer Tom Koutsantonis said that the betting industry has been growing and changing rapidly and the state’s tax system also needed certain changes to be implemented. The official further noted that if bookmakers are profiting from local players, they need to pay tax to the state, not to the jurisdiction they and their servers are located.

Bets placed on greyhound, harness, and horse racing, as well as football, and other sports would be subject to the new tax. The state would also tax betting operators on revenue from bets placed on federal elections, the Academy Awards, and other popular non-sports events.

South Australia-licensed bookmakers such as Ubet, interstate betting companies, and commercial companies like Ladbrokes and Sportsbet will be among those hit by the new Place of Consumption tax. However, they will be offered a tax-free threshold on net wagering revenue of less than A$150,000.

The first half a million raised from the new tax would each year be contributed to the South Australia Gamblers Rehabilitation Fund. This would be the first time when the betting industry would finance the organization.

The tax measure was generally welcomed by lawmakers and the public. The Opposition commented that they would support the Place of Consumption tax if that meant that a tax loophole would be closed.

Commenting on the new reform coming, South Australian Council of Social Service Executive Director Ross Womersley said that after conducting a comprehensive report on the matter, they have found out that with the rising popularity of sports betting, and online betting, in particular, more money generated from this type of gambling was contributed to other jurisdictions and not to the ones where operators made their money in.

According to the official, this required an overhaul of the current taxation regulations to be made, thus securing that South Australia would benefit from betting operations, as well.

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