Racing Victoria chiefs concerned over effects of PoC tax

Racing officials in the Australian state of Victoria are concerned about future funding of their sport after the introduction of a new point of consumption tax on betting companies.

The levy, passed by the state parliament at the end of last week, will be imposed from January and has been projected to cost bookmakers Aus$30m ($21.8m/€18.5m) a year. The tax will be charged on betting companies’ net wagering revenue statewide.

While the 8% charge is the lowest of Australia’s states – Queensland and two other states charge 15%, with New South Wales at 10% – Racing Victoria has expressed its concern that it could affect the betting industry’s financial support for its events, with the likes of Ladbrokes and Sportsbet among the major sponsors of races.

The organisation that regulates racing in the state is worried that the application of the tax to free bets and bonuses will “void” a guarantee they gave to the racing industry earlier this year to retain existing levels of financial support and partnerships.

Racing officials said they had lobbied hard on behalf of the online bookmakers’ interests, but the government had locked in a “disadvantageous position”.

Giles Thompson, chief executive of Racing Victoria, said: “It’s not a totally idle threat – they need to make money. But is it a rational decision of the corporate bookmakers to do that?

“It’s a threat we’re worried about, but even if it does transpire I’m not sure necessarily that it’s the rational decision to make, to turn their back on Victoria. They make good money out of Vic racing, it’s a very easy product to sell.”

Parliament passed legislation the new tax just as Racing Victoria revealed record turnover during the 2017-18 racing season. Some $6.42bn was wagered domestically on Victorian racing, which was up 2.7% despite a decline of more than 50% from one unnamed “key corporate bookmaker”.

However, there was a 6% slump in revenue from pari-mutuel betting turnover.

“Punters have got a far broader range of products than they've ever had before – they've got betting exchanges, they've got fixed-odds, and they've also got far more information than they've ever had before, so they can shop around a lot more,” Thompson said.