Sportsbet respond to SA gambling tax by pulling big investments

SPORTSBET.COM.AU has become the first online betting company to react to the South Australian Government’s plan to install a 15 per cent punters’ tax in the state.

The Government will become the first to tax bookies at the location the bets are wagered, rather than where the bookmaker is licensed.

And Sportsbet.com.au is so fearful that it has abandoned plans to establish a multi million dollar high tech data centre in South Australia.

It has also chosen to end its sponsorship with Gawler Racecourse after the Government decided it would proceed with the ‘place of consumption’ tax from July 1, next year.

The bookie’s Ben Sleep said plans for the $20 million data centre, that would have supported its other data facilities in Darwin and Melbourne, would no longer proceed.

“The South Australian Government’s decision to introduce its Punters Tax without industry consultation has created significant uncertainty, with South Australia now considered a high risk investment destination for any Australian based bookmaker” Mr Sleep said.

“Sportsbet cannot invest tens of millions of dollars into a state where its government has shown that it is willing to significantly move the goal posts without consultation with those most affected.

“This decision to proceed with the 15 per cent Punters Tax will not only cost South Australian punters, but the state will now miss out on dozens on high skilled IT jobs and millions of dollars of upfront and ongoing investment it can ill-afford to lose.”

He said the plan to establish the data centre in the state would have created dozens of jobs in South Australia, but that planned multi million dollar investment would now be redirected to the Northern Territory, where the bookmaker is licensed.

South Australian Treasurer Tom Koutsantonis last month said the tax would apply to bets on horse, harness and greyhound racing, and other sports such as AFL and soccer, from July 1, 2017. It will also apply to bets such as those on the winner of federal elections or the Academy Awards.

“The betting industry is rapidly changing and our tax regime needs to change with it,” Mr Koutsantonis said.

“If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not in whichever jurisdiction their head office and servers happen to be located.”

The punters tax has brought the online bookmaking community closer together, with several bookie giants abandoning their rivalries to team up in a campaign against the plan.

Cormac Barry, chairman of the Australian Wagering Council and spokesman of the Stop The Punters Tax campaign, said there were 200,000 online account holders in South Australia — close to a quarter of the eligible voting population — who will be “extremely unhappy” if the tax is introduced.

“We think this is an ill-thought-out money grab from the Treasurer and don’t think he understands the consequences,” the sportsbet.com.au boss said.

“Either the online operators will exit South Australia or they will have to pass the tax on to punters.

“In either event the result is bad news for SA punters and potentially disastrous for the SA racing industry.

“We’ll be emailing all 200,000 SA online customers to request they let the Premier and Treasurer know about this bad idea.”

Sleep said many thousands of Sportsbet customers had written to their local MPs voicing concern about the introduction of the 15 per cent Punters Tax, with many more registering their support through social media.

He said Sportsbet and other Australian based bookmakers would continue to oppose the South Australian Government’s ill-conceived tax.

But Koutsantonis said the bookies were putting together a scare campaign and the tax was fair.

“The tax doesn’t apply to the bets made, it only applies to net wagering revenue — in other words, the money that is lost to these companies by South Australians,” he said.

“If the harm from gambling is being done in South Australia, these betting companies should be paying tax in this state, not just in whichever jurisdiction their head office and servers happen to be located.

“Scare-campaign tactics won’t work here — this is a fair tax and one we believe will be adopted by other jurisdictions around the country.”

The government projects to raise more than $9 million per year from the tax, but Barry says the treasurer had given bookies very little attention over their concerns.

“He gave us a full 15 minutes of his time to tell us he doesn’t care what we think, or about punters or the racing industry and he’s very determined that he’s right,” Mr Barry added.

He said punters were set to pay more for their bets in South Australia.

Sleep was disappointed the sponsorship of Gawler would now be redirected to support Victorian tracks, where the bookmaker has existing relationships in place with Ballarat, Benalla, Echuca and Kyneton.

“It makes no business sense for Sportsbet to extend its relationship with Gawler due to the uncertainty created by the South Australian Government,” Mr Sleep said.

“If the Government was to turn around tomorrow and ban bookmakers from advertising or sponsoring events in the state, much like its decision to introduce the unfair Punters Tax, Sportsbet could be liable to pay for advertisements and sponsorships we can’t use.

“We are really disappointed to end our association with Gawler, and while we remain committed to supporting regional racing across Australia, sadly it won’t be in South Australia.”