TWO major changes in the Australian betting landscape have got the bonus bet under the pump.
For starters, the Victorian government’s decision to introduce a point of consumption tax has already got bookies looking at ways to offload some of the cost.
Coupled with the NSW Government’s decision to ban all inducements to sign up, the move could completely kill off the bonus offer in Australia because current geo-targeting standards in Australia are not good enough to ensure other states’ bonuses will not be seen by those in NSW.
This means the only way bookie bonuses could be offered in Australia is via email or app users, which have user location installed and active. Even then, BettingSite.com.au’s testing indicates that the accuracy is not at the level expected by NSW Gaming and Liquor.
The Victorian government is to benefit an estimated amount of $30 million annually from an 8 percent Point of Consumption Tax (PoCT) to be introduced on online corporate bookmakers next year. The new tax will apply to net wagering earnings.
This comes after such taxes were initiated in South Australia and Western Australia and the United Kingdom. The only difference is that the rate in those jurisdictions is 15 percent.
The law, which will take effect from January 1, 2019, expects all wagering and betting companies to pay the PoCT on bets placed by customers in Victoria. An estimated 25 percent of bets in Australia are placed in Victoria.
From a consumer point of view this new tax could potentially eliminate the bonus bet in Victoria with bookies on record as saying punters will feel the tax.
Why Victorians will feel the POCT tax
The Victorian consumption tax, placed on online corporate bookmakers will have bonus bet rewards and other promotions being the first to be affected.
Despite the rate being just about half of the other jurisdictions, the corporate bookers have threatened to pass on the cost to their clients.
With this, the first casualty will be the promotional type bets.
Anything apart from that will have only the bigger bookmakers surviving the extra cost with smaller operators having to struggle their way through.
This will ultimately result in punters having less choice. The corporate bookmakers have strongly kicked against the move, arguing that they pay several taxes including the GST, product and licensing fees to individual sports and the already burdensome corporate income taxes.
This leaves them in a poor position to pay the extra state levy.
According to bookmakers, this will affect promotional and marketing strategies because they will have to get into such areas of extra spending in order to generate the needed income to pay the new tax. In other words, the corporate bookmakers will have to cut down on areas of extra spending to get money for the additional cost.
A statement issued by Responsible Wagering Australia, the body which represents corporate bookmakers like CrownBet and Sportsbet, warns that the new tax law would have dire consequences in Victoria. It stated, it will have “significant negative and far-reaching consequences for Victoria”.
However, Victorian Treasurer Tim Pallas says the time is right for betting companies to pay the right taxes. He said online betting companies now have to “pay their fair share” of tax in Victoria.
In 2017, a combination of a percentage either of turnover or of gross revenue from online bookmakers was $157 million as cited in Racing Victoria’s financial report.
This is a quantum jump compared with the $85 million accrued in 2014. This proves the government can generate enough revenue from online wagering.
There is also a growing concern among gambling insiders that the ban on inducements in NSW and the increased tax regime in many states will dilute the product offered to punters and have them looking to the many offshore websites still supporting Australians.
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