The main body for Australian bookmakers, Responsible Wagering Australia (RWA), is worried about the suggested increase in betting tax in Queensland. According to the RWA, the increase in the said tax does not consider any potential measures taken by companies, which may lead to a $1.75 billion loss for the state’s revenue.
On Monday, during a parliamentary inquiry, RWA’s chief executive, Justin Madden criticised the suggestion to widen the point of consumption tax. According to him, the decision to increase the tax from 15% to 20% at the end of the year will not be favourable for many members of the body, including major names like PointsBet, Ladbrokes, and Sportbet.
Increase of Betting Tax May Cause $1.75 billion Slash in Queensland Racing Revenue
According to the Queensland treasury, the state’s racing body will receive almost $80 million in annual funding. Meanwhile, Tabcorp, which will benefit from the tax reform, will put an end to its agreement with Queensland Racing, ultimately contributing a lower amount to the racing revenue in the state. What is more, Madden believed the calculations of the state’s government about the potential budget were off by no less than $50 million.
The decision about the climb in betting tax was taken without any prior discussion with RWA or any of its members and came after 40 meetings between Tabcorp and the government, said Madden. As a result of the lack of any communication with other actors in the industry, the decision did not take into account important aspects of the economics of Queensland wagering and racing.
Madden noted that following the decision about the tax increase, some bookmakers had replaced the state’s racing with racing provided by other jurisdictions. He added that if all major bookmakers decide to do the same in order to compensate for the difficulties caused by the tax increase, Queensland racing revenue could suffer a loss of $1.75 billion in the upcoming two years.
Major Bookmakers Stop Prioritising Queensland Racing as They Push Back Against Betting Tax Raise
With the news of the tax increase, many bookmakers have stopped prioritising Queensland racing. A few months ago, Ladbrokes pushed down the state’s horse races on its app and decided to axe its longstanding $7.5 million sponsorship deal with Brisbane Broncos. Another bookmaker that cut down the number of Queensland races on its app was Sportsbet. However, it went back on its decision after signing a deal with Racing Queensland.
The bookmakers’ counter-actions against the tax increase were not surprising according to Tim Costello, a member of the Alliance for Gambling Reform. He added that the organisation was clueless about the political interests of gambling companies in Australia.
One bookmaker that welcomed the tax increase was Tabcorp, stating it had been in a disadvantageous race with rivalling online bookmakers for years. Adam Rytenskild, chief executive of Tabcorp, noted they have been facing competition from the likes of Flutter Entertainment, which is a significantly bigger company. With foreign-owned bookies, such companies have also been licensed to offer their products in the Northern Territory, further increasing their influence in the country.
Such claims were refuted by Madden, ensuring RWA members contribute significantly to the industry’s revenue by paying taxes in the country.
- Author
Daniel Williams
