Tabcorp managing director and chief executive Adam Rytenskild said the increase to the point of consumption tax had levelled the playing field for gambling companies in Australia.
“Online bookies will pay a greater share of wagering tax which can be invested back into the local racing industry and ensures a fairer system,” he said. “Online betting has changed substantially since the TAB’s licences were issued and this is an opportunity to better align with the modern economy.”
Under the current system, 2 per cent of taxable NSW net wagering revenue from all Australian licensed wagering operators is offered as support to the NSW racing industry.
But the government has decided to instead give the industry 33 per cent of the so-called point of consumption tax, which was introduced in 2019 as a tax on all wagers placed by NSW residents regardless of the licence registration location of the wagering operator.
The new formula will mean an average $66 million extra support for racing in NSW.
Racing NSW chief executive Peter V’Landys said while the taxpayer was better off from the reform, the changes limited the ability for the regulating body to increase its fees on the private gambling companies.
“It takes away our pricing power. The real winner is the NSW taxpayer as they receive the vast majority of the tax collected,” he said.
The peak body for corporate bookmakers like Sportsbet, Entain, Pointsbet and Bet365 urged further scrutiny of the plan, which it said raised “serious questions of due process and accountability” for the government.
Responsible Wagering Australia chief executive Justin Madden accused the government of engaging in a “backroom deal” and failing to consult.
“The decision today to raise the point of consumption tax will only serve to decrease competition. What government has done is allowed one entity to strengthen its commercial monopoly without paying a premium.”
The government will not substantially increase the $5 million a year it channels from gambling tax to addiction support services despite conceding online gambling is particularly harmful, but it will begin to increase with inflation from 2023.
“Online gambling has experienced rapid growth in NSW and a higher proportion of those who gamble online are reported to be problem gamblers than those who bet offline,” the budget papers said.
Australian Hotels Association boss Steve Ferguson welcomed the move for “levelling the playing field” for online and offline betting.
“The retail environment, the safest place to have a bet, has been paying a higher rate of tax than someone betting on their phone with a corporate bookmaker,” he said.
The increase to the point of consumption tax, which will take effect on July 1, brings NSW into line with Western Australia and South Australia. In Victoria, the tax is fixed at 10 per cent, while Queensland recently raised its tax from 15 to 20 per cent.
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