VICTORIA is the newest Australian state to introduce a point of consumption tax for online wagering, striking a blow for the online bookmaker industry in one of its biggest betting heartlands.
The Andrews Labor Government today announced the new tax, which has also been implemented in both South Australia and Western Australia, will apply from January 1, 2019.
The POCT will apply at a rate of 8 per cent of the net wagering revenue derived from all wagering and betting
activity by customers located in Victoria.
Victorian Treasurer Tim Pallas said the tax ensured online betting agencies were “paying their fair share.”
“We will continue to consult the industry and other stakeholders as we finalise legislation to implement the Point of Consumption Tax,” Pallas said.
Minister for Gaming and Liquor Regulation, Marlene Kairouz, echoed that party line in the same statement released today.
“Online betting and wagering agencies take a huge amount of money out of Victoria. It’s time they started making a fair and proper contribution,” Kairouz said.
The Government claims all revenue will go to the state’s hospitals and charities fund.
In a small mercy for online bookmakers, Victoria’s POCT is significantly-less than those introduced to other states. While the Western Australian and South Australian tax is set at 15 per cent, Victoria’s eight per cent hit could have been much worse for the industry.
Make no mistake, the POCT in Victoria is a blow to corporate bookmaker’s bottom line. An industry already in turmoil while dealing with the fall out of the new interactive gambling act will now feel the pinch as the Victorian Government takes a slice of its biggest market.
One corporate bookmaker told BettingSite.com.au today that ‘roughly 35-40%’ of all Australian betting comes from Victoria.
The Government estimates the tax will provide upwards of $30 million in revenue per year.
Want to know more about how the Point of Consumption Tax works? Read our guide here.
What effect will the POCT have on the Victorian horse racing industry?
One of the biggest questions coming from the announcement of the Point of Consumption Tax was its potential effects on the Victorian Racing industry.
In its announcement today, the Andrews Government claimed to have “undertaken extensive consultation with key industry stakeholders on design considerations and potential industry impacts since the PoCT was included in the Victorian Budget 2017/18.”
“The PoCT will be implemented in a way that protects Victorian jobs and does not adversely impact the Victorian Racing Industry (VRI), which is a major part of Victoria’s sporting landscape and cultural tradition.”
“The Government is committed to the principle that the racing industry will be no worse off as a result of this initiative, and will be contributing 1.50 per cent of taxable net wagering revenue to the VRI.”
In his own statement today following the announcement, Racing Victoria CEO, Giles Thompson, said that he was pleased that the industry as a whole would be ‘no worse off’ as a consequence of the new tax.
“The VRI has actively engaged with the Government to ensure that the potential risks from the introduction of a Point of Consumption Tax can be mitigated and will not be to the detriment of the future sustainability of Victoria’s racing industry,” Thompson said.
RV made the point that the new tax has the potential to increase the burden on WSPs and could very well have a negative impact on wagering turnover on all codes of racing.
“We look forward to a finalisation of the framework for the Point of Consumption Tax which seeks to ensure that the VRI and each racing code within it are no worse off and that the future sustainability of the VRI is not detrimentally impacted,” Mr Thompson said.
The Victorian Racing Industry is a major part of Victoria’s sporting and cultural landscape, and contributes $2.8 billion annually to the Victorian economy while supporting over 140,000 jobs and participants.
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