New South Wales Introduces POCT on Online Sports Betting
Australia-facing operators are breathing a sigh of relief after New South Wales imposed a 10 percent point of consumption tax (POCT) on online sports betting. The 10 percent tax is a compromise from a government that, at points in the debate, had asked for as much as 15 percent or even 2 two percent of the turnover.
The new tax scheme takes effect on January 1, 2019 and will not apply to an operator’s first $1 million worth of revenue.
As bad as a 10 percent tax on any part of their business may seem to outsiders, New South Wales bookmakers are actually catching something of a break, especially when compared to similar taxes imposed on their colleagues in neighboring states. In Queensland, Western Australia, South Australia, and the Australian Capital Territory (ACT) bookmakers currently pay a 15 percent POCT.
It’s estimated that the new tax will raise as much as $100 million in tax revenues for the state. That money will not, however, be used to feed the homeless or build housing for low-income families. Most of the proceeds generated by the online sports betting industry will be used to help prop up Australia’s anemic horse racing industry. A similar POCT scheme benefiting the horse racing industry is already in effect in the UK.
Not surprisingly, sports betting operators are not too happy about the new plan, which some have described as, “a naked tax grab.” They say that the new tax will have a big impact on their bottom lines and financial industry analysts agree. Officials at Paddy Power say the move could cost them as much as 1.4 percent of their total revenue.
The new taxation on sports betting takes effect on January 1, 2019.