Interstate Tax Modernizes Australian iGaming Regulation

Lee R. - June 28, 2016

Regulation systems taxing player location could be the wave of the future.

An interstate gambling tax in Australia will be introduced for the first time.

Millions in Additional Revenue

The new tax on operators operating between states in Australia awaiting final approval from the South Australia State Government is estimated to be capable of bringing in as much as Aus $9.2 million (€6.1 million/US$6.9 million) in new revenue each year.

The UK Model

The law is similar to the UK Point of Consumption tax: the UK example imposes a flat 15% wagering tax on place of consumption.

Bet Location Taxed

This represents the first time an Australian jurisdiction will tax according to the location of the bet placement, as opposed to the location of the operator itself.


Operators in Australia to be subjected to the new rates include Ubet, Sportsbet and Ladbrokes.

The Logic

Treasurer Tom Koutsantonis explained the adaptation to national newspaper The Australian:
“If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not in whichever jurisdiction their head office and servers happen to be located.”

Range of Activity

Koutsantonis further indicated that the tax would apply to punting activity ranging from horse, harness and greyhound racing punting to other sports such as AFL and soccer to bets on Academy Awards and federal elections.


The law, pending final Parliamentary approval, would take effect from July 1, 2017, with a tax-free threshold of $150,000 proposed for all betting companies.
Another first is the contribution of the betting industry to the Gamblers Rehabilitation Fund, with the first $500,000 proceeds raised each year by the tax earmarked.

Tax Reform

The legislation is the culmination of the Australian government's National Tax Reform process initiated prior to the 2015-16 State Budget, and initiated by the SA Council of Social Services. The new regime addresses so-called “taxation holes” of operators basing themselves in jurisdictions with the most favorable taxing conditions, such as Northern Territory and Norfolk Island.

The Interstate Taxing Solution

Interstate taxation is designed to more effectively harness the benefits of the rising popularity and increasing availability of online gambling. The Australian government's unification of online gambling taxation under the national authority serves to more equally distribute online taxation revenues.

Industry Implications

The federal centralization of tax revenues stands out as the key component of the reform, with interstate commerce laws offering one possible solution to the distribution of online taxation revenue in emerging jurisdictions worldwide.

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