Bookmakers Lobby for More Operator-Friendly Gambling Taxes in Victoria

Victoria-facing online gambling operators have reportedly launched lobbying efforts against the potential implementation of a 15% point of consumption tax, news outlet The Sydney Morning Herald reported earlier today.

If such a tax is adopted in the state, this would mean that online bookmakers will have to pay 15% on the revenue they have generated in the state. South Australia was the first state to introduce the remote gambling tax. The point of consumption regime came into force in July. Western Australia followed suit in discussing a similar measure and eventually approved its implementation. The state’s new tax regime is coming into force in January 2018.

It has become known that Victoria lawmakers have, too, commenced discussions over the potential implementation of a 15% point of consumption tax. The Sydney Morning Herald reported, citing unnamed industry insiders, that bookmakers have already begun pushing for a more operator-friendly tax rate.

International bookmakers are able to operate in Australia through licenses from the Northern Territory. They have long been blasted for not paying taxes to the Australian jurisdictions they have been operating in, hence states’ current efforts to change the status quo. Operators have responded to the accusations by saying that they have been making contributions to Australia’s economy through different other taxes and fees related to the provision of their products to Australian bettors.

Here it is important to note that sports betting is currently the only legal online gambling service in Australia. Under a recently enforced ban, operators are not allowed to target players with online casino games and online poker products.

According to information presented by the Responsible Wagering Australia group, representing online bookmakers including bet365, Ladbrokes, Betfair, and Unibet, among others, in Victoria only, operators contributed over A$127 million in wages, and nearly A$90 million in payments to the state racing industry and as part of sponsorship agreements during the previous financial year.

Reasons for the Introduction of the Point of Consumption Tax

Support of the point of consumption regime have pointed out that its implementation would “level the playing field” for all participants in the state’s betting industry, including international online operators and Tabcorp and Tatts who are required to pay much higher taxes than their remote gambling counterparts.

As revealed by industry representatives, bookmakers offering online wagering options have been vastly discontent with the possibility for the implementation of a point of consumption tax, and have ramped up efforts to change lawmakers’ mind. It is believed that bookmakers have been lobbying for a lower tax rate than the discussed 15% on their instate revenue.

According to an unnamed industry insiders, the majority of bookmakers would not be able to make a 15% margin on Victoria wagering, which would result in quite unpleasant consequences for the industry.

A 15% point of consumption tax was introduced in the United Kingdom in late 2014. According to analysts, the new tax regime did not affect operators’ betting revenue, but did impact industry profits in a negative manner.

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