The movement toward a more federally mandated point of consumption tax when it comes to online gambling is building. Dominic Perrottet, the New South Wales (NSW) treasurer, announced that the government is looking into the feasibility of this.
Background on Online Gambling Point of Consumption Tax
Currently, online betting companies are paying tax in the state that they are registered in. The majority of these online gambling companies are licensed in the Northern Territory, as the tax burden is significantly less.
Being the first state in Australia to introduce a point of consumption tax, South Australia is said to be implementing this tax on Saturday the 1st of July. This consumption tax will set operators back, 15% for every bet made by South Australians.
Implementation of Online Gambling Consumption Tax
Scott Morrison, the Australian Federal Treasurer, stated in March that the federal government had requested all states study the feasibility of implementing this tax in each state.
After this statement was made, both Victoria and Western Australia announced that they would jump on the bandwagon and implement the tax. Victoria even went as far as estimating the potential revenue that could be made from these taxes.
NSW calculated that they could gain approximately AU$130 million annually from this consumption tax. It aims to introduce it in 2018-19.
Words from The NSW Treasurer
Perrottet states that there are many options that could be considered, and if one is to be adopted, a national consumer protection framework for online gambling will be included.
He further expresses that the harm from gambling happens at the point of consumption. Therefore a point of consumption tax will result in the alignment of gaming tax revenue. Some of this revenue could even be applied to address social costs.
Online Gambling Operators Under Stress
Online gambling operators in Australia have recently undergone a lot of stress as the Australian government is buckling down on rules and regulations. Recently, bans have been made prohibiting gamblers from betting on live sporting events. Alongside this, heavy restrictions have been put on the incentives and credit that online casinos can offer their customers. If that wasn’t enough, there is also a ban on gambling advertising during sporting events being placed, as well as this latest point of consumption tax looming over their heads.
The recently approved Tatts-Tabcorp merger is also said to be shaking up the corporate bookmaking sector.
This consumption tax could prompt the merging of other major players such as Sportsbet, Crownbet, William Hill and Bet365.