Tabcorp remarks that this would level the playing field but its competitors argue that such an increase would hurt the market
The government of New South Wales is considering a tax increase of 5%, according to The Sydney Morning Herald. Under this proposal, filed by industry powerhouse Tabcorp, the tax on all bets would be increased from 15% to 20%. This would align NSW’s point of consumption tax (POCT) with that of Queensland.
Analysts believe that this increase has the potential to hurt some of Tabcorp’s competitors, including giants such as Ladbrokes and Sportsbet. Treasurer Daniel Mookhey, however, said that the tax hike would only happen if the government determines that it’s beneficial to the public.
The POCT was introduced in 2019, forcing corporate bookmakers to pay tax to the state where the wager was placed, instead of where the gambling company is based. The idea was promoted by Tabcorp, which is registered in every Australian state.
Unlike Tabcorp, many other bookmakers are registered in the Northern Territory, benefitting from its lower tax rates.
According to Tabcorp, the tax increase would “create a level playing field” and would represent a “positive step towards ensuring the sustainability of the NSW racing industry.”
As mentioned, the tax hike would align NSW with Queensland in terms of tax rates. However, this may not be a good thing, according to Barni Evans, Sportsbet’s chief executive officer.
In a statement, Evans pointed out that Queensland’s wagering turnover in Queensland has decreased significantly ever since 2022 when the state increased the POCT to 20%. Evans warned that prioritizing Tabcorp’s interests could damage the industry’s sustainability.
“It is important to ensure any change to the funding model does not prioritize one stakeholder above the sustainability of the industry. We welcome the opportunity to engage on this matter.”
Evans concluded that Queensland is proof that higher taxes do not necessarily signify a return to growth.
For context, NSW and Victoria committed to increasing the POCT to 15% this year. Experts believe that if NSW opts to raise the tax further, other states, such as Victoria, Western Australia, South Australia and Tasmania might follow.
