Betfair Australia chief warns against imposition of POC tax
News on 23 Feb 2018
News on 23 Feb 2018
Betfair Australia chief executive Tim Moore-Barton waded into the debate on a 15 percent point-of-consumption tax on operators by certain states Thursday, unveiling an impact report and warning that continued imposition of the tax will have far-reaching and in some quarters perhaps unforeseen consequences.
He warned of the “significant” threat to the integrity of racing and sports that could come about if operators were forced to up their odds to meet the increased tax demands, motivating punters to go to overseas websites to gamble.
His warnings come as the Victoria and New South Wales provinces appear set to join South Australia, Queensland and Western Australia in imposing the tax within their borders.
Betfair’s assessment argues that the tax rate is too high, forcing betting companies to hike commission fees to unsustainable levels, especially if introduced across the country.
Such increases would have to be passed on to the consumer, and have the potential to trigger a move to offshore operators by Aussie punters seeking better returns on their bets …good for business in the Philippines and similar online gambling hubs, but potentially disastrous for an Australian online sports betting industry already battling with government restrictions.
Moore-Barton noted that the ability of Australian licensed and regulated betting operators to accurately track and identify suspicious betting patterns would not extend to offshore activity with other operators, and could result an “integrity black hole”.
“We provide racing stewards and sporting bodies real-time access to our data to look for anomalies in betting patterns,” Moore-Barton said. “This transparency is lost and not available when people bet offshore.”
He added that his company was aware of many instances where professional gamblers have moved their business to offshore operators following commission increases necessitated by product fee changes, using this as an exemplar of what the punter reaction might be.
When interviewed, these punters tell Betfair that they considered fees were too high at Betfair, prompting a move to offshore operators who pay no product fees, GST, wagering or government taxes and can afford to charge lower fees providing higher returns to punters.
Coincidentally, customer leakage also removes all protections for customers and threatens vital revenue for Australian racing and sports bodies, because offshore operators do not pay them fees, the Betfair report claims.
The assessment quantifies likely losses, claiming that lost Betfair punters could equate to a drop in product fees to Australian racing bodies of A$31 million, and A$7 million in lost GST to the federal government,
Online corporate bookmakers like Betfair, Sportsbet, Ladbrokes, Bet365 and CrownBet operate nationally but are licensed in the tax-friendly Northern Territory.
Mainly retail and establishment bookies in Australia like the Tabcorp group have campaigned for the p.o.c. tax as a means of levelling the competitive playing field, arguing that their fees and costs are considerably higher than those of online operators.
Perhaps an indicator of the unease in the online gambling market in Australia are recent reports that William Hill is conducting a review into its operations there, and the sale of Crown Resorts’ 62 percent stake in CrownBets to a consortium led by CEO Matt Tripp for a reported A$150 million.
