Victoria’s New Tax Targets Online Gambling Operators

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Victoria has passed legislation which will impose a new point-of-consumption tax upon operators of online gambling websites. The 8% tax rate, while cutting into gambling operators' funds, is much lower than the proposed rate amid other states. Tim Pallas, Victoria's treasurer, made the announcement of a January roll-out for the tax. Said tax is expected to generate $30 million annually for Australia.

People who oppose point-of-consumption taxes have expressed concern about the lower tax rate, fearing that this will cause local gambling companies to be charged less than out-of-state operators. In South Australia, a 15% tax has been rolled out. Western Australia will implement a 15% tax in the beginning of 2019. Queensland has also pledged to roll out a 15% point-of-consumption tax.

Local gambling operators have opposed the more common 15% rate of tax, as they claim it will have too big a financial impact on their companies. The companies have put aside their competitive nature to push for a lower overall tax rate together, using the Responsible Wagering Australia group to push their message.

Right now, the majority of bookmakers have received their operation licenses through the government of the Northern Territory. This area has imposed significantly lower and fewer taxes. Online gambling operators will pay 8% in Victoria. Other Victoria companies have already had a 6% tax imposed, and they will need to pay the 8% on top of that.

All of the gambling companies across the state will need to pay the tax, regardless of whether they're a brick-and-mortar casino or not. The tax rates will be based on the location of players rather than the central location of companies. Responsible Wagering Australia has expressed disappointment with the state decision to impose the tax, although it did applaud the state government's consultative approach.

RWA's Executive Director, Stephen Conroy, stated that online gambling companies already pay exorbitant consumption taxes due to the GST (Goods and Services Tax). GST taxes are paid to Australia's federal government rather than the state governments. Conroy went on to say that an 8% tax rate was still too high when these companies already pay such a large percentage to the federal government, although he did admit that an 8% tax rate was better for overall business than a 15% rate. Globally, the new tax rate causes Victoria to have one of the largest overall gambling tax rates.

Meanwhile, campaigners against gambling have expressed displeasure with the tax rate because they claim it isn't high enough. The anti-gambling movement had previously campaigned for a 15% point-of-consumption tax in the state. The increased state revenue was meant to be spent on social programs and other societal initiatives. While the revenue from the 8% tax rate will still do this, anti-gambling campaigners are disappointed by the lost potential revenue from the lower tax rate. They claim they will not be able to accomplish the same social goals because of the tax levy.

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