Victorian Government raises Point Of Consumption Tax (POCT) in another blow to sports betting punters

The Andrews Labour Government has recently revealed its plans to raise the point of consumption tax paid by betting companies, which is expected to bring about significant changes in the Victorian sports betting and racing industry.

The decision to equalise Victoria’s wagering taxes with those of other states is expected to establish a sustainable framework for the industry’s future.

Yesterday, legislation was introduced to Parliament announcing an increase in the Point of Consumption Tax (POCT) from 10% to 15% of nett wagering revenue.

Starting on July 1, 2024, the state’s rates will be adjusted to match the rates currently implemented for betting and wagering activities in New South Wales, Western Australia, South Australia, and Tasmania.

According to reports, the majority of the increase in taxes will be allocated to the racing industry, despite only receiving 50% of the 15% POCT.

According to sources, it has been confirmed that the Hospitals and Charities Fund will be receiving the remaining 7.5% balance from the POCT distribution.

As of January 2019, Victoria has implemented a new Point of Consumption Tax (POCT), which has replaced the previous “place of supply” tax.

The implementation of Point of Consumption Tax (POCT) in Victoria is a measure taken to ensure that betting and wagering companies operating in the state pay their due taxes, regardless of where their headquarters are located.

Victoria’s decision to adjust its tax system for betting is a response to the evolving digital landscape of the industry. The move is intended to create a more cohesive tax structure.

The practical outcome of POCT implementation has been a rise in racing market percentages from 115% to 130%, leading to reduced returns and diminished value for punters.

In a recent announcement, the Victorian Government has disclosed its decision to eliminate the “no less favourable” obligation for licence holders in the wagering and betting industry.

Under the previous licence, licence holders were required to establish agreements with the racing industry that were not less favourable than those already in place.

Due to changes in gambling habits that have resulted in shifts in the betting market, a new licence will need to be issued when the current one expires in August 2024. This amendment has become necessary to accommodate the changing landscape of the industry.

Industry and government officials have collaborated to propose a new funding framework that involves wagering and betting taxes, as the State Wagering and Betting Licence (Tabcorp) is scheduled to expire in August 2024.

The Victorian Government has stated that the framework’s objective is to secure the industry’s sustainability and offer long-term assurance.

The Victorian racing industry is a vital contributor to the state’s economy, with an annual economic activity of $4.7 billion and providing employment to over 35,000 full-time equivalent workers.

The racing industry in Regional Victoria is thriving, with a significant number of clubs and participants showing their support. With over 100 clubs and 70,000 individuals involved, it’s clear that racing holds a special place in the hearts of many in the region.

The region benefits from a substantial economic value of $2.45 billion each year, thanks to this particular sector.

According to the Minister for Racing, Anthony Carbines, the racing industry holds significant value in both the economic and cultural aspects of our state. As per our commitment to the industry, we strive to provide unwavering support to ensure its continued success.

The recent changes are expected to provide the industry with a sense of stability in the long run, as it will guarantee that the funding for the industry will come from the wagering revenue generated by its product.

The industry’s support for jobs and events generates millions of dollars annually for communities across the state.

The Victorian Government has recently implemented a hike in the point of consumption tax (POCT), which they claim is a necessary measure to bring Victoria in line with other states and secure a prosperous future for the racing industry in the area.

It remains to be seen whether the customers will concur.