NSW racing industry gets financial boost as online betting companies hit
Tabcorp chief executive and managing director Adam Rytenskild said the consumption tax hike had leveled the playing field for gaming companies in Australia.
“Online bookmakers will pay a larger share of betting tax which can be reinvested in the local racing industry and ensure a fairer system,” he said. “Online betting has changed significantly since the TAB licenses were issued and this is an opportunity to better align with the modern economy.”
Under the current system, 2% of NSW net taxable betting revenue from all Australian licensed betting operators is offered as support to the NSW racing industry .
But the government has decided to instead give the industry 33% of the so-called Consumption Point Tax, which was introduced in 2019 as a tax on all bets placed by NSW residents, regardless of the place of registration of the license of the betting operator.
The new formula will mean an average additional support of $66 million for races in New South Wales.
Racing NSW chief executive Peter V’Landys said while the taxpayer was better off thanks to the reform, the changes limited the regulator’s ability to raise its fees on private gaming companies.
“It takes away our pricing power. The real winner is the NSW taxpayer as they receive the vast majority of the tax collected,’ he said.
The supreme body of corporate bookmakers like Sportsbet, Entain, Pointsbet and Bet365 has called for a closer look at the plan, which it says raises “serious due process and accountability issues” for the government.
Responsible Wagering Australia chief executive Justin Madden has accused the government of engaging in a “backroom deal” and failing to consult.
“Today’s decision to raise the consumption tax point will only serve to lessen competition. What the government has done is allow an entity to strengthen its trading monopoly without paying a premium.
The government won’t dramatically increase the $5 million a year it funnels from gambling tax to addiction support services, despite admitting that online gambling is particularly harmful, but it will start to increase with inflation from 2023.
“Online gambling has grown rapidly in New South Wales and a higher proportion of those who gamble online are believed to be problem gamblers than those who gamble offline,” the budget documents said.
Australian Hotels Association boss Steve Ferguson hailed the move to “level the playing field” for online and offline betting.
“The retail environment, the safest place to bet, pays a higher rate of tax than someone betting on their phone with a corporate bookmaker,” he said.
The point increase in consumption tax, which comes into effect on July 1, aligns NSW with Western Australia and South Australia. In Victoria, the tax is set at 10%, while Queensland recently increased its tax from 15 to 20%.
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