Who benefits from a Point Of Consumption Tax (POCT) on racing?

Originally published at: https://australianracinggreyhound.com/australian-greyhound-racing/administration/who-benefits-from-a-point-of-consumption-tax-poct-on-racing/93234/

State and territory governments are increasing their stranglehold on the shrinking pools of racing revenue funds through Point Of Consumption Taxes (POCT) on wagering. The public sell is “harm minimisation” and a “level playing field”. The reality is protection of the state base totalisator licence holders from corporate bookmakers who have innovated and brought competition…

The government has agreements with tab until 2033.Government set the wagering tax rate,Tab gets exclusive rights.To only now ask for submissions on how to tax $1.4 billion plus that is bet online on racing and sports shows the government has dropped the ball.
The simple solution is charge online bookmakers a licencing fee equal to fixed odds tax (around 5%)on all bets placed on events held in NSW, regardless of their business address. Compliance is the governments problem, but because it is revenue they will chase it.The sticking point is the TAB bets retail (in person ) and online.The government should absorb any missed taxation from TAB until a new agreement in 2034.
Racing codes should be making submissions and fighting for a distribution share on any new taxation on their product.A new distribution agreement could also challenge the validity of the current inter code agreement.

Yes Kevin the punter always pays.
Gone are the days when the on course bookmaker would often go home losing money.
Here’s one punter who’s almost given up, looking for an opening.

The POCT is a tax on NET Wagering Revenue and in your gaming example would be applied to the 15% aat the rate of 10%, not added to the 85% which is a legislated obligation. Further 70%+ of the wagering operators in Australia have stated publicly they will not pass the tax on at a cost to them of net wagering revenue from racing of say (0.5-0.55%) which may mean less bonus bets or marketing or sponsorship to preserve the exiting margin. Also a bookie, if it could pass it on in full as per your example, faces a situation where many punters have multiple accounts, thus it would either increase its risk of loss (and reduce its revenue) or if it won on all occasions, increase its Net Wagering Revenue thus increasing the tax to be paid. Finally, the smaller bookmakers in terms of turnover (who are not taken over in the ongoing market consolidation) will benefit from the tax being levied only above a threshold level e.g. $0.5 or $1 million. The tax is being brought in to ensure all the benefits of on-line gambling by bookmakers is not passed to the government of the NT(where they pay minimal tax). None of the benefits of the NT tax flow to the wider racing industry whereas in several of the States the racing industry will benefit from all or part of the tax being passed to it. Also, the latest official statistics on total wagering turnover in Australia indicates in the year 2015/16 it increased by 3.5, on-line gambling is the fastest growing segment and not being taxed has eroded the states’ revenue base. It would seem that the real issue is whether the loss of bonus bets, marketing and sponsorship will be greater than the increase the racing industry gets from the flow-on of the tax where governments take this action.

As a student of statistics, you’ll appreciate that Racing’s proportion of those wagering figures has reduced not increased.

And if you can pen a similar article which explains the effect of POCT using net revenue as the basis, we would be happy to run it. Suspect it’s not actually possible to model net revenue per greyhound event as each operators net profit and each authorities fees and taxes per event are not readily available to be evaluated.

There will be no bet increase to racing. Two major syndicates are already in the process of moving overseas. Whether they continue to bet here remains to be seen.