The Australian State of Victoria is the latest in the country to approve a point of consumption tax on online bookmakers, which is expected to generate A$30 million a year.
The bill assesses an 8 percent tax on net wagering revenue statewide based on whether the bet was placed in the state, rather than where the bookmaker’s operations are located. The bill passed the state upper house on the last day of parliament before the state election in November.
The tax will apply to bookmakers such as Sportsbet, BetEasy, Ladbrokes, Bet365 and Betfair.
Victoria’s tax is lower than tax rates of 10 percent scheduled to be introduced New South Wales and 15 percent in other states including South Australia, Western Australia and Queensland.
However, some bookmakers have opposed the law’s application of the tax onto “free” or “bonus money” bets, which they maintain do not involve actual money. Many bookmakers say applying the tax to these sorts of promotional bets would “void” a guarantee they gave to the racing industry earlier this year to retain existing levels of financial support and partnerships, according to the Sydney Morning Herald.
Online bookmakers invest heavily in Victorian thoroughbred, harness and greyhound racing, with naming rights and race sponsorships such as the Ladbrokes Cox Plate and the Sportsbet Ballarat Cup, as well as sponsorships with broadcaster Racing.com, the Herald reported.
“They are significant, material investments,” Giles Thompson, chief executive of Racing Victoria told the paper. “It’s never been argued corporate bookmakers get a free ride in Victoria. It’s not a totally idle threat—they need to make money. But is it a rational decision of the corporate bookmakers to do that?”
