The Governments of Queensland and New South Wales have introduced a new point of consumption (PoC) tax on bets, becoming the latest states in Australia to do so.
Last year, South Australia became the first state to implement a PoC tax on corporate bookies, at a rate of 15%. Since then, a number of jurisdictions within Australia have followed South Australia’s lead by introducing their own taxes.
Queensland and New South Wales are the latest to announce new tax rates on all online gambling bets. Queensland’s tax is also set at 15%. According to Bloodstock, an online horse publication, the Queensland tax will go into effect on October 1.
It adds that the PoC tax will apply to all betting operators that are licensed in Australia. However, no tax will be paid up to a turnover threshold of AU$300,000 (£170,000; $227,000) in a fiscal year. As a result, smaller operators will be protected from having to pay tax.
Western Australia and Tasmania are expected to follow suit in the coming months. Victoria was believed to be introducing a tax of 8%, but a report from May highlighted the fact that the Victorian government had failed to announce a PoC tax on corporate bookmakers in its 2018-19 state budget.
NSW decides on tax rate
After months of deliberation, the New South Wales (NSW) government has revealed that it will be applying a 10% point of consumption tax on all online betting operators, the Australian reports.
The NSW tax will go into effect on January 1, 2019. According to the report, it’s hoped that the new tax will bring operators in line with how much tax they pay, including major operators like Ladbrokes and Sportsbet.
About AU$100m (£57m; $76m) a year is projected to be raised through the tax, with AU$40m (£23m; $30m) a year going to the racing industry. The report adds that the PoC tax will have no impact on existing racing tax arrangements in the state.
At the moment, most of Australia’s online gaming operators are located in the Northern Territory, but they only pay low fees to take part in the industry. New South Wales Treasurer Dominic Perrottet, said that the tax is an “important step to ensure that we are leveling the playing field given the wagering tax paid by onsite operators”.
He added: “Following an extensive consultation period with stakeholders, this decision will resolve the disconnect between the jurisdiction where gambling activity occurs and where it is taxed. We also want to make sure that the racing industry is no worse off under these changes, which is why we have taken steps to ensure that they receive fair compensation and that existing parity arrangements are unchanged.”
Rather than implementing a 15% point of consumption tax like South Australia has introduced, Perrottet said that the government felt a 10% tax struck the right balance. For New South Wales, a 15% tax on top of the goods and services tax (GST) and race field fees was too much for operators in the market. However, to ensure an equal playing field among online competitors, Tabcorp, the anti-gambling lobby, and the Hotels Association were hoping for 15%.
“We will review our 10% rate in 18 months and also keep a close watch on how other states progress with their POCT,” added Perrottet.
Earlier this month, it was reported that the Australian Capital Territory (ACT) had announced a new PoC tax for online betting services in the state. Effective on January 1, 2019, operators will be hit with a 15% tax. With several Australian states now putting their own taxes into place, this means that governments will receive fees from wagers placed by players in their state.
Even though gambling is considered a problem—in Australia it’s reported that 200,000 people struggle with problem gambling—it also brings in a lot of money. Figures suggest that, in 2014-2015, total gambling expenditure in Australia was AU$22.734b (£12b; $17b). This increased 3.9% in 2015-2016 to AU$23.648b (£13b; $17.4).