Online operators that provide gambling services across Victoria are not really happy with the latest proposal for a new tax regime. Some time ago, Victoria government unveiled a plan to impose a 15% point of consumption tax on the bookmakers. In that way, South Australia has become the first state to adopt such a levy imposed on the online gambling operators.
The new tax regime produced the expected effect of vexed operators asking for lower taxes. Currently, Victoria government is facing the important question of how much taxes the bookmakers should pay. After South Australia introduced a point of consumption tax on corporate bookies last year, Western Australia and all other states wasted no time to embrace the idea.
If there are multiple factors that determine the profitability of the online gambling industry, taxation tops the list. Most of the online gambling companies that operate in Australia are licensed in the Northern Territory, but their major operations are based in Melbourne in most of the cases. That comes as no surprise, having in mind the low license fee in the Northern Territory. In that sense, the operators do not pay any taxes to the jurisdictions, in which they operate.
The online betting companies, on the other hand, explained that corporate bookmakers provide a solid financial support to the country’s economy, supporting Racing Victoria and other sports. As a result, Victoria’s Treasurer Tim Pallas has been under pressure for quite some time as bookmakers ask him to adopt a lower license fee. The bookmakers have already put the wheels in motion. Responsible Wagering Australia (RWA), the body that represents the Australian online wagering industry, has been tasked with filing the online betting companies’ case to the State Government.
In an official statement, the executive director of RWA, ex-Labor Senator Stephen Conroy, explained that the RWA’s main goal is to ensure that the officials from all Australian states are familiar with the online gambling industry’s contribution to the economy and the point of consumption tax rate complies with that.
Online Gambling Industry’s Contributions to the Australian Economy
Mr. Conroy backed up his statement with figures. He explained that the online gambling industry created more than 900 jobs in 2016/17 fiscal year. Apart from that, the online gambling industry provided a financial help of $78 million to the racing industry and $11 million to support Victoria’s tourism sector. Racing Victoria chief executive officer, Giles Thompson, noted that the State Government should be aware of the negative economic outcome that any proposed tax hike might trigger.
The gambling industry has already witnessed a similar scenario, when English lawmakers imposed a 15% point of consumption tax in 2014. Industry insiders explained that the new taxation system did not affect the operators’ revenue in any way. However, the country was the most affected party as the industry contributions dramatically shrunk.
Anti-gambling activists, on the other hand, welcomed the idea of the tax hike. They explained that Victoria should keep pace with all other Australian states when it comes to the tax imposed on the online gambling operators. Anti-gambling advocate Tim Costello believes that the new tax regime will also crack down on gambling ad “bombardment”.