Australian Sportsbooks Warn Against State-Based Wagering Taxes

Australian Sportsbooks Warn Against State-Based Wagering Taxes

By Trey Killian | February 23rd, 2018

Online betting exchange Betfair, one of the only online betting providers available in Australia, has made a bold argument against state-based wagering taxes. The taxes, Betfair contends, will cause many punters to switch to illegal offshore betting exchanges and greatly endanger the integrity of sports betting across the continent.

As a betting exchange, Betfair links prospective gamblers who support opposing outcomes of races and sporting events while maintaining a database of around 20,000 active monthly consumers. In addition, they pay fees to the sports leagues and racing commissions to help keep the relationship between the two complementary.

Moore-Barton Says Taxes Will Do Harm

Tim Moore-Barton, chief executive of Betfair, touted the company’s ability to regulate integrity by spotting betting patterns and providing access to all data to sports entities. He argued that the transparency is now "lost" and not an option when betting offshore:

“They might have an algorithm or an edge on a product and are consistently making money at low margins, then price increases make their models unviable and they suddenly stop betting with us. They are not a losing customer who stops because their bank runs out - when we reach out to them, these customers say our fees have become too high and they are moving their money offshore to operators who pay no product fees, GST, wagering or government taxes and can afford to charge lower fees providing higher returns to punters.”

Moore-Barton additionally claimed that the racing and sports industries as well as the government would suffer greatly financially at the hands of customers who switched to overseas providers because said providers don’t pay fees or work alongside them as Betfair does:

“Assuming these customers bet via Betfair, this equates to approximately lost product fees to Australian racing bodies of $31 million, and $7 million in lost GST to the federal government.”

Pro-Tax Parties Want Level Playing Field

Counterpoints to Moore-Barton and Betfair’s claims come from state governments, and pub operators who provide gambling services onsite. Tabcorp, a major Australian betting company, is also among the disparagers as chief executive David Attenborough as the increase in taxes would, he maintains, “level the playing field” for other Australian gambling businesses and providers:

“We are paying vastly more fees and taxes. This means they [corporate bookmakers] will start to pay more for offering gambling products in Australia ... and, by its very nature, will at least reduce some of the money they are piling into marketing.”

According to a report by The Age, the levies are causing serious concern to online bookmakers including Betfair, TopBetta, Ladbrokes and Crownbet. Industry insiders expect that bookmakers will be eventually forced into mergers by the oppressive tax hike in attempts to pool resources. The report explained:

“Industry insiders say the majority of the online bookmakers would be unable to absorb the added impost in their margins, and are likely to begin a wave of mergers in an effort to stay sustainable. Casino giant Crown Resorts is soon to seal a $150 million sale of its share in digital bookmaker CrownBet to a team led by CrownBet' boss Matt Tripp, who is also understood to be weighing merger options. Corporate bookmakers and racing authorities have recently ramped up efforts to sway Victorian Treasurer Tim Pallas to consider online wagering revenue at a lower rate than 15 per cent.”

Negotiations on the taxes and discussion are still on the table, despite the growing fears of Betfair and other online bookmakers. A government spokesman assured that there is still time for both supporters and detractors to make their cases:

“Like all states, we continue to look at this issue and are considering feedback received as part of an extensive consultation process.”

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