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Bookies will pay more tax in Victoria from July next year in a proposal welcomed by the racing industry and anti-gambling advocates, after Tabcorp argued online foreign-owned betting agencies were not paying their fair share.
The tax on Victorian betting losses will be increased from 10 per cent to 15 per cent under legislation introduced in state parliament on Tuesday. But despite the dire position of the state budget, most of the revenue would go back into the racing industry.
Victorian Treasurer Tim Pallas pictured in November last year.Credit: Jason South
The point of consumption tax (POCT) was first introduced in Victoria in 2019 in response to concerns that foreign-owned online gambling agencies were effectively avoiding paying tax in Australian states. Victoria initially set its rate at 8 per cent, the lowest tax rate of any jurisdiction, but increased that to 10 per cent in 2021.
The rate will rise to 15 per cent in July 2024 to bring it in line with NSW, Western Australia, South Australia and Tasmania. The rate is 20 per cent in Queensland and the ACT.
Most of the increased revenue would go back into the racing industry. Half of all POCT revenue would be distributed into racing, and the remainder would go towards hospitals and charities.
Most corporate bookmakers – including Ladbrokes, Sportingbet and Neds – hold a sports bookmaker’s licence in the lower-taxing Northern Territory despite operating nationally, meaning the bulk of their profits return overseas.
Racing Minister Anthony Carbines said the proposal hit the right balance and provided long-term certainty for the racing industry.
“These changes provide vital long-term certainty for the industry and ensure that it continues to be funded from wagering generated on its product – helping the industry to back jobs and events that bring in millions of dollars each year to communities right across the state.”
The Alliance for Gambling Reform chief advocate Tim Costello welcomed the decision to claw back online gambling losses but said there should be a nationally consistent framework. He said the rate should be higher, and the racing industry should not reap the revenue.
“This is cosmetic. It’s good given the crisis the Victorian budget’s in, but it’s a Band-Aid,” Costello said.
“It shouldn’t be going to racing.”
The Greens previously called on the Andrews government to lift the POCT rate to 20 per cent and agreed the revenue should not go to the racing industry.
Tabcorp chief executive Adam Rytenskild last year publicly pushed for online rivals to pay more and a spokesman welcomed the announcement on Tuesday.
“Tabcorp has long advocated for foreign owned online bookmakers to pay their fair share of wagering fees and taxes to ensure the sustainability of racing industries across Australia,” the spokesman said.
The government would also remove the “no less favourable” requirement for the wagering and betting licence holder, in an acknowledgement that most betting has moved online. Tabcorp currently holds the licence, which expires in August 2024.
The Victorian Racing Industry said the proposal would provide long-term certainty to the industry by raising its share of tax revenue.
“Funding certainty helps drive important decisions around investments in events, programs, and infrastructure right across the state. It drives jobs and helps maintain vital commitments to protect the safety and welfare of animals and participants,” Racing Victoria chairman Brian Kruger said in a statement.
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