By Vanessa Cavasinni, editor Australian Hotelier
As of 1 July, the South Australian Government has introduced a ‘place of consumption’ tax of 15 per cent on the Net Wagering Revenue (NWR) for betting companies on bets made within South Australia.
South Australia is the first Australian state to introduce a wagering tax based on the location where the bet is made. The law will apply to bets made on horse, harenss and greyhound racing, and sports like AFL, cricket and soccer.
Treasurer Tom Koutsantonis said the law was reflective of the need for revenue in the state to be taxed within the state.
“The betting industry is rapidly changing and our tax regime needs to change with it.
“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.”
A $150,000 tax-free NWR threshold has been proposed. Companies such as UBet, Sportsbet and Ladbrokes will be affected by the tax, as well as all licensed South Australian bookmakers. UBS, the global financial advice firm, suggests that Tatts Group already pays roughly 15 per cent tax in South Australia and will therefore be mostly unaffected by the law, and that Tabcorp’s tax bill may increase slightly, as they are paying approximately 10 per cent tax on business outside of New South Wales, Victoria and the ACT.
Koutsantonis has also allocated some of the revenue made from the new consumption tax to help people with a gambling addiction, with a $500,000 contribution to the Gamblers Rehabilitation fund to be made each year.
Based on 2014-15 data, the wagering tax is expected to raise $9.2 million each year in new revenue for the South Australian Government.