Several sports betting businesses threatened to pull out their operations from Australia’s Northern Territory if their taxes were raised, local broadcaster ABC uncovered. At least three betting companies said they would abandon the region in submissions to the Australian government the broadcaster accessed under the Freedom of Information Act. According to the local media, the operators made the threats during consultations for a review of the Racing and Betting Act, which regulates thoroughbred racing, on-track, and remote sports wagering in the Northern Territory.
The Northern Territory is largely dubbed the traditional home of sports wagering companies in Australia as most of them are registered there. This makes the region the principal regulator of the sports betting industry Down Under. Darwin, the Northern Territory’s capital city, is home to a call centre, an IT centre, and other sports wagering facilities. The betting companies provide employment to many Centralians and significantly boost the local economy.
The submissions came to light only after the local broadcast media requested access to them under the Freedom of Information Act. The Territory’s licensing agency eventually released them but removed the names of the operators that threatened withdrawal. Their submissions came in response to a review into the Territory’s betting legislation conducted independently by the third-party law firm HWL Ebsworth back in 2018.
Economic Contribution Taxes Were the Cause of the Operators’ Outrage
The review proposed that 20% of the sports wagering companies’ labour costs should be spent in the Northern Territory. Businesses that failed to meet this requirement faced an economic contribution tax equal to three times the dollar amount of the local labour deficit. One operator argued the new levies could undermine the financial viability of licensed betting businesses and cause them to go bankrupt.
Another company said the proposal for the extra levies was unjustified. The proposed taxes could drive away locally licensed operators and lead to job losses in the Northern Territory, the company argued. A third operator warned betting companies could choose to altogether cease doing business in the region as a result of the higher associated costs.
Responsible Wagering Australia, the independent body that represents locally licensed betting operators, said it anticipated another consultation before any reforms were made. According to the industry body, licensed betting companies annually contribute around $1 billion in tax money. A significant portion of this amount is paid in the form of point-of-consumption levies, i.e. the tax money goes to the states and territories where the gamblers are located regardless of where the operators are based.
More Submissions from Non-Industry Representatives Are Needed
The Northern Territory presently collects approximately $10 million in annual revenue from bookmaking businesses alone. Doctor Matthew Stevens, a statistician and gambling researcher at the Menzies School of Health Research, insists the local government must consult more widely prior to introducing dramatic changes to an industry with such a considerable socio-economic impact.
Stevens came across the open consultation by sheer chance after visiting the NT Licensing site. It struck him that nearly all submissions were made by peak bodies or industry representatives. Dr. Stevens insisted the review must also consider submissions from other sources like former problem gamblers, social services, and academic researchers working in different fields.
Sports wagering is becoming increasingly normalised in the country, with the number of televised gambling advertisements in Victoria witnessing a dramatic increase over the last five years according to a recent Nielsen report. Young male Australians are particularly vulnerable and prone to sports betting, another research showed earlier this year.
Yet, this is not the first instance of gambling companies interfering with the recommendations of independent reviews. Earlier in 2022, local media reported a key proposal from a 2018 review into remote wagering and sports integrity was to undergo changes after an outcry from gambling industry representatives.
- Author
Daniel Williams
