Victorian government moots new tax for online bookmakers

VICTORIA is considering a new tax scheme for online bookmakers.

In budget papers released on Tuesday, the government proposed a number of updates to gambling legislation and revenue collection that will aim to capitalise on the growing number of punters who take their business online.

Also on the agenda is an overhaul of consumer protection laws for the online gambling industry.

“At the next Council on Federal Financial Relations meetings, treasurers will consider a potential model that includes a national consumer protection framework and provides for commonwealth oversight,” the budget papers said.

“This initiative will better align Victoria’s wagering tax system with the increasingly digital betting environment.”

The move follows a recent agreement between the states and the federal government that could see point-of-consumption taxes for online betting rolled out nationwide.

South Australia set the trend in 2016 when the Weatherill government announced a 15 per cent tax on net revenue exceeding $150,000 per annum for bookmakers who offer their services to residents of the state.

Prior to that, all Australian betting companies were taxed according to their location rather than where their products were being used.

Most of the country’s online bookies – including industry leaders such as Sportsbet, CrownBet, Ladbrokes, William Hill and Bet365 – are licensed and regulated in the Northern Territory.

Ben Sleep, the chief financial officer at Sportsbet, said his firm would welcome a new tax model if it created uniformity from state to state and accounted for the licensing fees and other taxes Australian bookmakers already pay.

“Sportsbet looks forward to working with the federal government and state treasurers to ensure that any consideration of a new tax is balanced with the wagering industry’s already high tax contribution along with considerable fees paid to racing and sport,” he told Newscorp media.

Victoria is expected to rake in $1.9 billion in gambling tax revenue for 2017-18, although the budget papers predicted a drop-off in takings from lotteries and Crown Casino over the next four years.

What we think of Victoria’s proposed bookie tax

This was always going to happen once South Australia set the tone.

While the idea of taxing bookies on point-of-consumption makes plenty of sense (certainly from the state treasury’s viewpoint), one has to wonder at the roll-out plan.

If there is indeed an agreement between the states and the commonwealth for an Australia-wide gambling tax shuffle, then why are we not hearing about a unified and coherent introduction scheme?

And will these new revenue streams flow at the same rate across the country?

The tax and licensing system for online gambling is already inconsistent and outmoded, so the last thing the industry needs is a new layer of wonky legislation that varies from state to state.

If they are serious about doing this properly, then Canberra and the states must work with the bookies to find a solution that ticks the necessary boxes without throwing more sludge into already muddy waters.