After much deliberation, the Victorian Government has decided on a tax for online bookmakers. The Victorian state settled on 8% tax for online casinos operating in the state.
The tax, although much more lenient than other states, has been met with opposition. Some of the arguments brought to light include; online betting operator concerns that the new tax laws will negatively affect their profits. While casino operators are concerned about profits, anti-gambling groups feel that the tax is too lenient. However, the state argues that the new tax is a fair amount. It believes the tax will contribute to the economy without harming the online casino industry in Victoria.
Why was the Tax Introduced?
The new tax reform for online casinos was introduced because some online casino operators were evading taxes. These online casinos licenced their companies in low tax regions. Therefore, the new tax requires online casinos to pay taxes according to the region where they are based, rather than where they are licenced.
Australian casinos who provide onsite gambling are, however, lobbying for equal taxes to be paid by all Australian casinos, online and land-based. Some local gambling operators have proposed a regulated national tax for all Australian casinos.
Financial analysts and Tim Pallas, who is the state treasurer in Victoria have warned against hiking the tax to 15%. The state treasurer worries that a tax as high as the other states would harm the online Australian casino industry in Victoria.
The racing industry expressed concerns that a high tax would not only affect the online betting industry but the sponsorships they provide too. The online casinos may also worsen the odds for their gamblers to cover the tax or pull out their businesses from Victoria altogether.
Overview on Victorian Online Betting Tax
A complete withdrawal of online gambling operators from Victoria is not likely to happen as other states have operators paying even higher taxes. Online casinos in Victoria still have time to work out a way to deal with the proposed tax reforms. The tax policy depends on legislation that needs to go through the state parliament first before it’s passed.
The 8% is expected to raise an estimated AU$ 30million. This amount will go towards a fund for charities and hospitals. In addition, a small amount will be given to the racing industry to offset the anticipated shortfall in income due to fewer sponsorships.