South Australia’s Proposed Gambling Tax Draws Criticism from Operators

Mike P. - August 12, 2016

South Australia has revealed a new 15% net wagering tax for July 2017, while the government has also blocked esports betting.

South Australia’s government has hit the headlines in August 2016 for revealing plans to introduce a new form of online gambling taxation. Throughout the world, jurisdictions frequently alter their taxation legislation, but few changes command the attention that has recently been given to South Australia’s government.

15% Net Wagering Tax

Fundamentally, South Australia’s new online gambling tax is designed to target bets based within the jurisdiction, rather than tax operators based on where they are situated. At present, the intention is for the government to apply a 15% tax on net wagering when the new legislation comes into law as of July 2017.

When the tax is introduced, South Australia’s government has forecast earnings of AU$9.2 million per year. Comparatively, this would be similar to the AU$10 million generated annually in Australia’s Northern Territory jurisdiction. This is notable because most of the major operators are situated in the Northern Territory, where taxable revenue on wagering is capped at the low rate of AU$550,000.

In response to the South Australia government’s announcement, the Australian Wagering Council (AWC) has launched a social media campaign that refers to the forthcoming change as a “punter’s tax”. AWC chief executive Ian Fletcher has warned that the tax will benefit overseas operators and damage Australian sport.

Place of Consumption Tax

To counter Fletcher’s statement, South Australia treasurer Tom Koutsantonis argued that the place of consumption tax will only apply net wagering revenue, with the state’s residents only losing money on failed wagers. In fact, Koutsantonis is so confident in the tax succeeding he has also predicted other Australian states will follow suit.

However, the AWC has cautioned that the tax will only result in South Australia’s residents receiving lower odds and fewer offers, while also winning less money. Among the members of the AWC are global operators in bet365, Ladbrokes, and Unibet.

eSports Betting Blocked

In other news, South Australia’s government has also inspired articles relating to its esports stance. Just recently, the government made the decision to ask that the Independent Gambling Authority does not approve the legalisation of betting on esports. Driving the decision was the concern that children could be vulnerable to this new form of betting.

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