Aussie online gambling operators combine to fight South Australia tax

Australian online gambling companies that usually compete against one another for business are planning to collaborate in fighting a common problem – the imposition of the South Australian government’s proposed new ‘place of consumption’ tax.

The South Australian tax proposal was introduced by state treasurer Tom Koutsantonis recently (see previous report), with a plan to implement from July 1 2017.

The proposal calls for a tax of 15 percent on net wagering revenue targeted on firms that earn more than A$150,000 a year and offer services to South Australians.

Importantly, the proposal emulates the British concept of taxing transactions based on where the bets are placed (ie the punters’ devices) instead of where the betting company accepting the bet is registered or located.

The campaign being planned by online gambling operators will seek to mobilise the players themselves, urging them to protest to their political representatives.

Sportsbet chief executive Cormac Barry told The Australian newspaper that he plans to write to his more than 100,000 South Australian customers to warn against the tax.

“When the South Australian Treasurer refuses to engage with us in any real sense we are left with little choice but to take the fight directly to the public,” he said. “We’ll continue to ramp up the pressure until we get this tax scrapped.”

Barry said that the tax proposal was a surprise for operators, and that the provincial government had not consulted with the industry before announcing it.

He noted that if implemented it will make South Australia “the highest taxed online wagering environment in the world.”

“Operators are going to have two options: withdraw from that market or make their prices and promotions for South Australian punters worse,” he opined.

Seven West Media chief executive Tim Worner said that the proposed tax was another example of a worrying trend of regulation and taxation without consultation.

“The point of consumption tax is another example of Australian businesses who pay tax and play by the rules set in Australia being disadvantaged against unregulated foreign service providers,” he claimed.

“The end result will be that consumers will move to unregulated providers and this cannot be in the best interests of consumers,” he added.

Companies supporting the drive against the South Australian tax proposal include Sportsbet, Ladbrokes, Bet365, Betfair and Unibet. The campaign has been dubbed “stop the punters’ tax” and launches immediately with full page newspaper advertisements and a social media campaign.

South Australia’s Treasurer Koutsantonis claims that the p.o.c. based tax ensures that businesses pay taxes in the jurisdiction where they are making their money, emphasising that the first A$500,000 raised each year will go to combat problem gambling.

In his dual role as chairman of the Australian Wagering Council trade association, Barry met Koutsantonis last week and suggested that the industry could itself fund the Gamblers Rehabilitation Fund, but that the treasurer has shown no interest in such a solution and was in fact “quite dismissive.”

Barry warned that legal action was a possibility, and that if operators withdrew from the South Australian market there would be “…no funding to racing and sport, no GST to the federal government, no corporation taxes to the federal government.”

The Australian Wagering Council position on the tax is that it will ultimately damage Australia’s uniform responsible gambling initiatives by pushing punters into dangerous and unregulated overseas betting sites.

“South Australian punters are being treated like a cash cow by the South Australian government. Should it come into effect the tax will mean all South Australians lose, including the South Australian government that thinks putting its hands in punters’ pockets is a fast track to easy money,” Council chief executive Ian Fletcher said.

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