Back in December 2014, Tatts Group Limited and Tabcorp Holdings submitted an appeal to the High Court of Australia, related to the taxes for the old poker machines.
Mere hours ago, the Judge, who was in charge of taking the final decision, rejected companies’ appeal. If their applications had not been dismissed, the Premier Daniel Andrews would have paid them the sum of $85 million.
The gaming giants entered a legal battle with the Victorian government as they found the taxes they were supposed to pay to be “unfair and unreasonable”. The levy was implemented by Michael O’Brien, the former Treasurer.
Tatts Group and Tabcorp used to operate a large number of poker machines available on the territory of Victoria except for those in Crown Resorts in Melbourne. However, back in 2012, their license was not renewed when pokies were transferred to pubs and clubs.
Although the coalition government of Denis Napthine was in charge of the pokies for less than 2 months, Tabcorp and Tatts Group received a bill and were notified that they had to pay the levy for the entire year.
The levy in question has been scrapped recently but initially, it was known as the “health benefit” levy. The amount of money generated was given to healthcare and charitable organizations in the area.
Anyway, companies were supposed to pay taxes totaling $84.6 million. Tatts’ officials strongly disagreed with the sum required. According to their estimates, they had to pay $7 million only.
Then, Mr. O’Brien said that he did not consider estimations based on a pro rata to be accurate enough but the Court ruled in favor of Tatts.
However, last year, the Court approved of Mr. O’Brien’s claims under the pretext that the “statutory language permits no other interpretation”.
Tatts and Tabcorb took provisions for the taxes they were supposed to pay for 2013-2014. In other words, Court’s decision from today is not likely to have other impact as far as the financial aspect is concerned.
The earnings of Tatts over the previous fiscal year have declined by more than $25 million, while Tabcorp reported decrease of $19 million. People with knowledge on the matter attributed the smaller decline to the fact that Tabcorp used to work in collaboration with the Victorian racing industry.
The other compensation cases, concerning the final decision of the Brumby Labor government to prevent the extension of the companies and therefore, disable them to provide their services, are still on the agenda.
