The gambling industry in the state of Victoria, located in South East Australia, might be facing some challenges after lawmakers passed a bill that would impose an 8 percent point-of-consumption tax on all gambling operators within the state.
The new tax plan is expected to launch in January of 2019, and experts believe that an additional $30 million dollars will be generated annually for use in public projects, and social services.
The rate is considerably smaller than similar taxes being implemented or introduced throughout the country. South Australia and Western Australia in addition to Queensland have all enacted or plan to enact, a 15 percent point-of-consumption tax. The announcement has critics bristling, as they express a fear that the rate could possibly decimate the local gambling economy.
Gambling companies bet365, Sportsbet, and Crownbet claim that a point-of-consumption rate as high as 15 percent will negatively affect their bottom line. They argue that while remote gambling operators will only have to begin paying the 8 percent tax in January, local gambling operations-who already pay a 6 percent levy to Victoria State-will see their businesses crumble once the tax hike goes into effect.
Therefore remote gambling operations will have the advantage over regional gambling companies who have already been paying a levy, and now must find extra money to cover the cost of the new tax hike.
In addition to all companies paying the point-of-consumption tax, under the new law, companies will also be responsible for knowing the location of players who place bets. Another point of contention between advocates and proponents.
Gambling companies are lobbying against this legislation as they claim they already pay an exorbitant amount to the Federal Government of Australia, through the Goods and Services Tax. In fact, the major lobbying firm for gambling companies, Responsible Wagering Australia (RWA), have argued that Victoria’s implementation of the new tax, could possibly affect global gambling tax rates, by setting a precedence for gambling industries the world over.
There is already a considerable increase in online gambling globally, large tax rates could spell disaster for a country attempting to create a strong gambling economy; especially with the presence of remote gambling operators online.
However, advocates for the point-of-consumption tax, claim the revenue generated from the tax could be used to benefit society in a variety of ways. They argue, that 8 percent, is not even close enough to help with infrastructure matters such as roads, healthcare, education and other social services.
They argue that a 15 percent tax would better serve society, as that money would directly help those who need it the most. The estimated $30 million in revenue could transform the state of Victoria tremendously, giving it a national platform and increased international presence in the gambling industry.
Whether the state of Victoria fully implements the 8 percent tax remains to be seen, as the legislation still needs to be approved by Parliament, with any luck a more nuanced discussion between both sides, will see a smart piece of legislation in which everyone gets what they desire.