South Australia is launching a new “place of consumption” tax for betting operators offering services in the state. The new tax will be the first time an Australian jurisdiction has targeted betting companies based on where the bets are made, rather than the location of the operator.
The tax will be calculated as 15 percent on the net wagering revenue of all betting companies, with the government estimating to raise around A$9.2 million a year in new revenue.
According to S.A. Treasurer Tom Koutsantonis, the tax, which comes into effect on July 1 2017, would apply to bets on horse, harness and greyhound racing, and other sports such as AFL and soccer.
Clubs Australia today welcomed the SA Government’s ‘sensible and proactive’ approach to making sure online betting companies pay a fairer share of tax. Clubs Australia Acting Executive Director Josh Landis welcomed the announcement saying, “This measure means companies that make money in South Australia, will pay tax in South Australia.”
UK wagering giants including William Hill, Paddy Power and Bet365 will be hardest hit. They have long based their ‘official’ place of business in low taxing jurisdictions, like the Northern Territory and Norfolk Island, in order to minimise their tax contribution. It is believed those operators located in the Northern Territory paid only $7 million in wagering tax in 2014-2015 on a gambling turnover of $9.7 billion. In comparison, licensed clubs would pay somewhere in the order of $200 million in gaming taxes on a similar level of turnover.
Australia’s two largest wagering operators, Tabcorp and Tatts Group, will be largely unaffected by the change.