Responsible Wagering Australia (RWA), the country’s chief association for online bookies, is pushing back against the Queensland government’s decision to increase its point of consumption tax, saying that the move may drive companies away, which could lower state revenues by as much as US$1.14 billion (AUD$1.75 billion).
RWA CEO Justin Madden told the Guardian that the tax increase—which will see the existing rate of 15 percent balloon to 20 percent—will put his members, such as PointsBet, Ladbrokes and others, at a disadvantage.
Meanwhile, Tabcorp is set to benefit from the new reforms, in the sense that its rates, which have historically been higher than that of other companies, will decrease somewhat, in what the company has praised as a “leveling of the playing field.”
Madden lamented the fact that the policy change “was announced without any prior consultation whatsoever with RWA or our members and follows, we understand, 40 meetings between the government … (and) Tabcorp.”
He also asserted that the state’s budget estimations were wildly inaccurate, perhaps by over US$30 million.
“As a consequence of this lack of full consultation with industry, the decision was regrettably taken with an absence of key facts about the economics of wagering and racing in Queensland,” Madden told the Guardian.
He concluded that “if all major corporate wagers made their own decision to fully mitigate the cost of the Queensland government’s decision, somewhere in the order of $1.75 billon in Queensland racing turnover would be lost just in the next two years.”
The increase is set to take effect December 1, and the Queensland treasury has estimated that the tax revenues would provide Racing Queensland with about US$51.9 million in funding per year.
Since the hike was announced, however, some bookies have already begun to shift away from the Queensland racing market in preparation for the dwindled revenues.
In one example, Ladbrokes recently nixed a multimillion-dollar sponsorship in Brisbane as a result of the changes, and has largely deprioritized Queensland racing on its platforms.
Conversely, Tabcorp has welcomed the government’s decision, maintaining that the online bookies haven’t been paying their share of taxes, given their control over the digital betting industry in the state.
Tabcorp CEO Adam Rytenskild previously asserted during inquiry proceedings that his company’s competitors “have foreign-owned bookmakers licensed in the Northern Territory,” and are “domiciled in tax havens such as Dublin and the Isle of Man to minimize their tax liability.”
Rytenskild continued by saying that “whilst many Queensland businesses suffered through Covid, foreign-owned bookies like Sportsbet and Ladbrokes shipped more than half a billion dollars of profits out of Australia.”
