Aussie Provincial Government Approves 8 Percent Online Betting P.O.C. Tax (Update)

Victoria state becomes the latest to impose controversial point-of-consumption tax on online betting operators

The Australian state of Victoria made good on its promise to impose an 8 percent point-of-consumption tax on online gambling operators accessing its residents this week voting in the tax on the last day of parliament prior to the November elections.

Although less severe than the 10 and 15 percent of GGR levied by sister states (see previous InfoPowa reports), the new tax makes prospering in the competitive market more difficult. It is set for implementation from January next year, with the state anticipating it will reap a A$30 million tax harvest from its new revenue stream,.

Among the companies scheduled to be hit by the tax are Sportsbet, BetEasy, Ladbrokes, Bet365 and Betfair, who have complained that the tax is set to apply to the “free bets” and “bonus bets” they regularly give out to punters. They insist free bets are not real money and therefore should not be taxed as revenue.

Online operators have also warned that applying the tax to these sorts of promotional bets could “void” a guarantee they gave to the racing industry earlier this year to retain the considerable existing levels of financial support and partnerships. In this they have been supported albeit not successfully by Racing Victoria as the state government pushed ahead regardless in following the example of other states.

All-Aussie retail and online betting company Tabcorp and the Australian Hotels Association are probably celebrating the p.o.c. tax approval today (Friday) following months of hard lobbying for the tax.

They used the argument that there is a need to level the playing field with online betting companies, many of which are foreign owned and licensed relatively cheaply in the Northern Territory, where they pay significantly less state tax.

Anti-gambling activists are also reportedly pleased by the decision, hoping that it will make operators cut back on their excessive public advertising.