Proposal Introduced To Raise Tax Rates for Victoria Online Betting Sites
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Online betting sites operating in the southern Australian state of Victoria could see their point of consumption tax (POCT) rate increase from next summer with half of any resultant proceeds going to help support the local horse racing industry.
Under proposed legislation introduced by the government of Premier Daniel Andrews on Monday, the POCT rate would rise by 5% from July of 2024 to 15% so as to bring Victoria into line with numerous other states including South Australia, Tasmania and Western Australia.
Evolving Environment
Victoria introduced its POCT regime in 2019 amid concerns that foreign-owned online gambling firms were effectively avoiding the payment of tax by being licensed in the lower-taxing Northern Territory jurisdiction, despite operating nationally.
Home to some 6.7 million people as well as some of the nation’s most prominent sporting events, Victoria initially set its POCT tax rate on online bookmakers at 8% before increasing this tariff to 10% last year.
Equilibrium Effort
Anthony Carbines serves as the Minister for Racing within the Andrews government and he asserted that the proposed POCT rise would strike the right balance so as to provide the local horse racing industry with ‘long-term certainty’ while keeping Victoria below the 20% tariff currently levied by the northern state of Queensland.
“These changes provide vital long-term certainty for the industry and ensure that it continues to be funded from wagering generated on its product, which will help the industry to back jobs and events that bring in millions of dollars each year to communities right across the state,” Carbines told The Sydney Morning Herald.
Significant Support
Many in the industry have also welcomed the projected increase in the POCT rate including Melbourne-headquartered gambling giant Tabcorp, which has been alleging that numerous foreign-owned online sports betting firms are not paying their fair share of tax.
The Chief Executive Officer for Tabcorp, Adam Rytenskild, last year joined with Victoria’s anti-gambling lobby as well as pub industry representatives to publicly push for a rise in the POCT rate with a company spokesperson having used an official statement to welcome the Tuesday announcement.
“Tabcorp has long advocated for foreign-owned online bookmakers to pay their fair share of wagering fees and taxes to ensure the sustainability of racing industries across Australia,” the spokesperson said.
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The Chief Advocate for the Alliance for Gambling Reform anti-gambling lobby group, Tim Costello, similarly welcomed the POCT rise proposal, which could be put to a vote from as soon as next month, despite criticising the lack of a national consistent framework and the measure’s support of the local horse racing industry.
“This is cosmetic,” Costello said. “It’s good given the crisis the Victorian budget’s in but it’s a Band-Aid. It shouldn’t be going to racing.”
Alternative Angle
The Greens political party garnered 11.5% of the popular vote in Victoria’s late-November parliamentary elections and had been arguing for the state to increase its POCT rate to 20% without using any resultant revenues for the support of the local horse racing industry.
In an acknowledgement that most betting has now moved online, the proposal from the Andrews government will furthermore look to remove the ‘no less favourable’ requirement attached to the state’s 12-year retail wagering and betting license, which was awarded to Tabcorp in August of 2012.
Sector Succor
For his part, the Chairman for the state’s principal Racing Victoria Limited horse racing authority, Brian Kruger, welcomed the proposal to raise the POCT rate as a way of providing his industry with long-term ‘funding certainty’.
“Funding certainty helps drive important decisions around investments in events, programs and infrastructure right across the state,” Kruger said. “It drives jobs and helps maintain vital commitments to protect the safety and welfare of animals and participants.”
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