ONLINE gambling in Australia is set for a shake-up after the South Australian Government announced plans to tax bookmakers 15 per cent of their net wagering revenue.
The State Government is introducing its “place of consumption” tax on all betting companies offering services in SA as part of the state budget, which is set to be released next month.
This is the first time in Australia that a betting company will be taxed based on where a bet is placed, rather than the location of the company’s headquarters.
This means outlets such as William Hill and Sportsbet, which are based out of Sydney and Melbourne respectively, will not be exempt from the tax.
A tax-free threshold of $150,000 is proposed for all betting companies, but given Treasurer Tom Koutsantonis announced that the tax will affect all racing and all sports, almost all online bookmakers will exceed that amount.
The tax aims to generate over 9 million dollars a year in additional revenue for the local government, $500,000 of which will be contributed annually to the Gamblers Rehabilitation Fund.
Despite the radical change, Mr Koutsantonis said the racing industry will be ‘no worse off’ due to the tax.
The place of consumption tax was first mooted in the Government’s tax review prior to the 2015 state budget.
The Government said at the time the new gambling tax would be considered as part of the National Tax Reform process, which suggests the Federal Government may follow SA’s lead on implementing an online gambling tax.
Mr Koutsantonis said the tax signals a changing of the guard when it comes to online wagering in Australia.
“The betting industry is rapidly changing and our tax regime needs to change with it,” Mr Koutsantonis said.
“If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not in whichever jurisdiction their head office and servers happen to be located.
“By implementing a wagering tax based on the place of consumption, we are ensuring that businesses are paying taxes in the jurisdiction in which they are making their money.”