Thursday, December 21, 2017

Victoria Racing Industry Officials Share Concerns of New Point-of-Consumption Tax

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Victoria Racing Industry Officials Share Concerns of New Point-of-Consumption Tax

Officials from the Victorian horse racing industry have raised a red flag that new online betting taxes could have negative influence on the operators’ performance in the market, which on the other hand could cost millions of dollars that the local racing industry was supposed to get as funding.

As reported by The Sydney Morning Herald, many Australian states have made steps towards introduction of a point-of-consumption tax estimated to 15%, which basically means that for the first time ever, the state where an online wager is placed is to be granted with part of players’ losses.

New 15% Point-of-Consumption Tax

For the time being, it is South Australia which has implemented the point-of-consumption tax, with the latter already being in force there. The next Australian state which is to implement the new 15% tax in January 2018 is Western Australia. Queensland is also to become part of the states which are to add the point-of-consumption tax to their gambling landscape. The states of New South Wales and Victoria are also expected to introduce similar tax.

However, as mentioned above, the racing industry’s players in the state of Victoria have shared their concerns about the possible negative impact that such a tax could inflict on their betting revenues in case it is implemented there. According to industry officials, the companies that will most seriously suffer from the negative impact of the new 15% tax, are the online corporate bookmakers, such as CrownBet, William Hill, Ladbrokes and SportsBet, which have been rapidly growing and are licensed in the Northern Territory that features lower taxes.

Lately, Australia’s online bookmakers have boosted their efforts to persuade Government leaders in the state of Victoria to consider imposing a lower rate of the new tax than 15%. The new 15% point-of-consumption tax has its supporters, too, with them claiming that its implementation is very important, as it would bring balance to the online gaming industry.

Racing Victoria’s Reactions

The governing principal racing authority in Victoria – Racing Victoria – has also commented on the new point-of-consumption tax roll-out. The authority’s Chief Financial Officer, Aaron Morrison, explained that the Victoria racing industry had been relying on funding generated by online wagering operators.

As revealed by Mr. Morrison, the funding gathered by Racing Victoria from local sports betting operators over the past financial year nearly equalled the revenue of its joint-venture with TAB. This is exactly why Mr. Morrison explained the officials’ concerns that corporate bookmakers could suddenly face some negative consequences such as cost base increase, and anything that could have harmful impact on betting revenues would present real risk.

What is more, according to Racing Victoria’s CFO, there were only several bookmakers that generated enough profit to be able to deal with a 15% point-of-consumption tax, which on the other hand could hit their investments in marketing campaigns and sponsorship agreements with Racing Victoria. Passing on the costs to players by boosting the prices and offering worse odds to their customers could be another negative effect of the implementation of the point-of-consumption tax.

The post Victoria Racing Industry Officials Share Concerns of New Point-of-Consumption Tax appeared first on Casino News Daily.


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