Australia’s federal government is planning on harmonising state-level online sports betting point-of-consumption taxes (POCT), something that is potentially going to be bad news for bettors in the Northern Territory.
The federal treasurer, Scott Morrison had a meeting with the respective state and territory counterparts so as to discuss the forthcoming 2017 budget. After the meeting, Scott Morrison made a comment to the media that they had reached an agreement to implement a proposal for an approach to the point of consumption tax on online gaming.
Consequently, point-of-consumption tax means that online betting companies will have to pay tax on every bet that is taken from players who reside in a particular state. Before, online gaming companies would just pay a certain percentage of gross gambling revenue to the territory where their operations are based.
The Purpose of POCT
Scott Morrison says that the idea to implement online sports betting taxation has nothing to do with raising revenue. He added that it has more to do with making sure that harm is minimised for both sporting bodies and punters (bettors).
Already, South Australia has confirmed that they will be introducing this system. More so, the system will be effective from the 1st of July 2017. The federal state will charge 15% tax on the bets that will be made within the borders of the state. This is also a rivalry scheme that was adopted by the United Kingdom in 2016.
To add on, the state treasurer of South Australia, Tom Koutsantonis affirmed that it is vital for online gambling companies to pay tax as they generate their profits based on betting activities done by South Australians.
Why It’s a Downfall for Bettors and Online Gambling in Australia?
As previously mentioned, Scott Morrison’s proposal to charge 15% tax on betting companies is as a result of minimising harm for all sports bodies and bettors. However, on the other side of the coin, a higher tax may result in reduced promotions and bonuses together with lesser odds of winning for bettors. To add on, this might make Australia an expensive industry to offer online betting.
In a nutshell, off late, Australia has been focusing on additional changes to its online betting system, such as banning poker and in-play sports betting as well as possible restrictions on gambling adverts during live sports broadcasts. The federal state is looking at reaping about AU$9.2m per annum from the 15% tax charged on the wagering revenue.