TAB Sale in Western Australia Will Cost Overseas Bookmakers
Overseas commercial bookmakers who operate in Western Australia look set to pay a Point of Consumption Tax as of January 1, 2019.
A reform designed to compensate the racing industry is being readied and the newly planned taxation means betting operators with headquarters overseas or interstate will now have to pay tax – expected to be in the region of 15% – on all bets placed in the state of Western Australia.
The proposed reform will be funded by the Western Australian Government’s recently revealed plans to privatise the Totalisator Agency Board (TAB), the state-owned betting agency.
Despite years of uncertainty over the future of the TAB, which is similar to the Tote system commonly used at race tracks in Ireland and Britain, any sale will be worth up to a reported $500 million in Australian Dollars, though the government have stopped short of putting a precise valuation on their product.
They have, however, confirmed that 35% of the proceeds from the sale will be reinvested into the local racing industry, with the reform package to include the introduction of a Point of Consumption Tax (POC), which will replace two existing levies.
Following Victoria's Lead
Those two existing taxes in the state are the Racing and Wager WA Tax and the Bookmakers’ Betting Levy, both of which are to be abolished in favour of legislation similar to what is already in place, or at least soon to be, in other Australian states.
In Victoria, for example, POC tax will be introduced from January 1, 2019, approved on the back of a paper produced by the Victorian Government which found residents spend approximately $1.2 billion per year on wagering and betting on horse racing, greyhound racing, sports and other events.
"Increasingly, this wagering is with online corporate bookmakers licensed outside of Victoria which do not currently pay wagering tax to the state," the Victorian Government paper revealed.
A similar problem was developing in the state of Western Australia, but Treasurer Ben Wyatt believes the sale of the TAB and the subsequent implementation of their reform proposal will secure the future of the racing industry.
"The reason why every state in the nation has gone down a Point of Consumption tax path is because it means that those [online] foreign-owned corporate bookmakers will for the first time be paying tax in Western Australia," he said, per the Australian Broadcasting Corporation.
"This is the most significant reform proposal in a long period of time and, in our view, clearly the most generous package for industry in the country.
"The TAB is using its cash reserve to keep it going — that's not a sustainable way forward."
Windfall for WA Racing Industry
As well as over a third of the eventual sale price of the TAB, the Western Australian racing industry will receive 30% of the total revenue collected from the POC tax.
South Australia was the first state in the country to introduce a POC tax and applied it at 15% on all bets placed in the state, while Queensland followed suit with the same rate, thereby setting the standard across the nation.
British bookmakers William Hill, Bet365 and Ladbrokes all operate in Australia, as do Betfair and Swedish operator Unibet.
Legislation will be introduced into Parliament this week with the view of having the system in place by January 1, 2019.
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