New South Wales’ (NSW) state government will consider Tabcorp’s proposal to raise the point of consumption taxes (POCTs) to 20 percent.
In NSW, wagering operators pay POCT of 15 percent. Tabcorp proposes that the increase be implemented by the government to align NSW with the other states who charge a 20% rate.
Queensland, as well as the Australian Capital Territory have an octroi rate of 20 %. NSW increased the rate only from 10% to 15 % in June 2022. In January 2019, it introduced a 10% initial rate.
The POCT is based on the place where wagers are made, not the location of the operators who accept bets. All operators operating in NSW will be subject to the tax regardless of where they are registered.
Tabcorp’s proposal also includes several points related to the reform of legislative requirements and licensing for betting. Reforms could include the requirement of entering an agreement with racing and a 10% shareholder limit.
NSW Treasurer urges operators to pay “fair Share”
NSW Government said that the final decision will be based on the value of money and benefits for NSW taxpayers, as well as the ability to provide a future sustainable funding model for NSW Racing Industry.
Submissions are being sought from all parties affected by these changes, including betting operators.
Daniel Mookhey said, “Gambling firms should pay their fair share always.” The NSW government is going to scrutinize Tabcorp’s proposals. If it’s clear to the public that they will benefit, then change will occur.
David Harris, the minister of gaming and racing in NSW, said: “The NSW Racing Industry generates billions for the NSW Economy and supports tens and thousands of jobs.” NSW wants to make sure that all who work in the racing industry and those who participate will have a future and the public gets its fair share.
Before we implement any of its elements, we must ensure that the proposal is in the best interests of the community at large as well as the racing industry.
Tabcorp hails “positive step” for NSW
Tabcorp issued a press release on this matter in which it welcomed the formalization of the process.
Tabcorp has said that if implemented the reforms will create an even playing field, modernise exclusivity in retail, and be similar to reforms recently made in Victoria and Queensland.
Tabcorp stated that this is an important step in ensuring the future of NSW’s racing industry. We look forward to working with the NSW Government and NSW Racing Industry during this process.
Addisons: Higher POCT may reduce competition
Jamie Nettleton is also a gambling lawyer at Addisons and has commented on this news. Nettleton expressed concern over what rate effect such a decision could have in NSW, especially in terms of the competition on the market.
Nettleton stated that “a further increase in the POCT would impact bookmakers substantially.” It is presumed that this will lead to an increase in tax revenue, but will it be true? Some commentators suggest otherwise.
Bookmakers will also be unable to provide attractive wagering options if taxes or other charges continue to rise. The increased taxes will also likely limit competition as the largest bookmakers are unlikely to be able to cover the tax.
It will be interesting to see what other reforms are being considered.
