The government of New South Wales has announced a 5% increase to the Point of Consumption tax on corporate sportsbooks. With this development, the POCT will rise from 10% to 15% and the new rules will be effective on July 1, 2022.
Tax Revenue Is Set to Increase by Over $500 Million
NSW’s tax increase is part of the new budget of the government and it will mostly impact foreign online sportsbooks. According to government estimates, the tax revenue is set to receive an additional AU$740 million ($517 million) annually.
Australia’s largest gambling company, Tabcorp, which employs over 5,000 people, welcomed the new tax changes. The company’s managing director and CEO, Adam Rytenskild, stated that this represents a step forward in “leveling the playing field” in the state.
Rytenskild also added that online sportsbooks will now pay a larger tax and that the money will be used for further investments in the racing industry. Recently, Tabcorp’s investors voted in favor of demerging the lottery into two entities – The Lottery Corporation and Tabcorp (Demerger).
Steven Gregg, chairman and non-executive at Tabcorp, stated that the demerger sets both entities for future success.
Of the AU$740 million ($517 million) extra tax revenue, AU$265 ($184 million) will be invested back into the racing industry. Foreign operators did not welcome the changes as nicely as Tabcorp. Corporations such as Sportsbet, bet365, PointsBet and Entain stated that the new plan raises serious accountability and due process questions. Justin Madden, the chief executive of Responsible Wagering Australia, stated that the government is engaging in behind-the-scenes deals without consultation.
Queensland Also Introduced Tax Changes
At the start of June, Queensland’s government also announced that under a revised plan, the Point of Consumption tax will have a new 5% racing levy. Cameron Dick, the treasurer and minister for trade and investment, stated that these changes will provide certainty to the racing industry in the state.
According to Dick, a lot of the money that is going back to the racing industry is in the form of short-term investments. He also added that the online betting industry has changed a lot in the past couple of years and Queensland needs to make sure that it keeps up with the pace. Hence, it needs to adapt to the changes.
Tabcorp saluted the changes in Queensland as well. Rytenskild acknowledged the fact that online betting changed the market and greeted the government for making these adjustments. Grace Grace, the racing minister of Queensland, also shared her thoughts and stated that the new changes will provide the 125 racing clubs in Queensland with more sponsorship opportunities.