New Online Gambling Tax in South Australia
The Australian Wagering Council has slammed the decision by the South Australian government to implement a ‘place of consumption’ tax on bets laid within the state. The tax will see betting companies charged based on where punters are laying their bets, rather than where the organizations themselves are located. For example, Sportsbet, which is based in Melbourne, will no longer be exempt from tax on bets laid by South Australian punters. Ian Fletcher, Chief Executive of the Australian Wagering Council, said the tax would make it very difficult for Australian sports betting companies to operate in the state.
“This tax will significantly impact the ability of Australian licensed wagering providers to operate in the South Australian market and give a free kick to unlicensed offshore operators, who are merely a mouse click away and who pay no tax in Australia.
“A place of consumption tax will adversely affect government, consumers and racing and sporting bodies. It is untenable in practice,” he said.
South Australian treasurer, Tom Koutsantonis, has defended the tax, saying it is about charging companies fairly.
“If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not whichever jurisdiction their head office and servers happen to be located.
“We are ensuring that businesses are paying taxes in the jurisdiction in which they are making their money,” he said.
The tax was also implemented to counter the fact that quite a number of betting agencies, including Sportsbet, Luxbet, Centrebet and Bet365 are all partly based in the Northern Territory, where taxation is a lot less stringent. During the 2013 financial year, bookmakers based in the Northern Territory generated $8.5 billion dollars in bets, but only paid $2.5 million in taxation, according to senator Nick Xenophon.
Koutsantonis referred to this system in the Northern Territory and other places as a “tax haven”.
“One of the things we identified is that with the rise of sports betting in Australia, and online betting, lots of the taxation related to that betting was paid in other jurisdictions — effectively tax havens — in particular, the Northern Territory and Norfolk Island, both of which have very preferential arrangements for taxation.”
This tax will see an extra 9.2 million dollars of revenue generated for the state. The treasurer has also pledged the first $500,000 of that revenue will be put toward the Gamblers’ Rehabilitation fund. The tax applies to all major betting markets, including horse, harness and greyhound racing, as well as AFL, soccer and non-sporting novelty markets and will come into effect as of July 1st 2017.
Koutsantonis doesn’t believe the tax will negatively affect the racing industry. However, the Australian Wagering Council disagrees, saying this will increase the taxation burden on their members.
“AWC members already have existing financial obligations in the form of federal taxes, state licensing fees and product fees. The imposition of a ‘place of consumption tax’ would significantly increase the taxation burden.”
Chief financial officer of Sportsbet, Ben Sleep, has called the tax a short-sighted money grab. He also believes the decision will make national based betting companies move away from the South Australian market.
“The tax applies to every bet placed on every race around the country, so not only will this decision decimate the SA racing industry — which stands to lose millions in product fees — it will hurt every racing code across the country as Sportsbet, and other bookmakers, are forced to decrease their investments in Australian sport and racing.”
Sleep also believes this decision could force South Australian punters to pay higher fees, which could lead them away from national betting agencies.
“This will encourage South Australians to bet with unlicensed and unregulated offshore operators to get the best odds available,” he said.
The South Australian government based the tax on the United Kingdom’s own ‘place of consumption’ policy. That tax was introduced in 2014 and many have been satisfied with its success over there.
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Writer at the Australian Betting Organization
Nic studied at Monash University and is currently working as a sports journalist. You'll often find Nic at the pub enjoying time with friends while watching UFC and WWE.
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