POCT Rate Hike to Benefit Horse Racing Industry
Starting next summer, online betting sites in Victoria, Australia, may experience a rise in their point of consumption tax (POCT) rate, with half of the extra revenue supporting the local horse racing industry.
The government of Premier Daniel Andrews proposed the legislation on Monday to increase the POCT rate by 5% from July 2024, reaching 15% and aligning Victoria with other states like South Australia, Tasmania, and Western Australia.
Adapting to an Evolving Environment
Victoria’s POCT system was implemented in 2019 to address concerns that foreign-owned online gambling companies avoided paying taxes by obtaining licenses in the lower-taxing Northern Territory jurisdiction.
With a population of 6.7 million and numerous major sporting events, Victoria initially set an 8% POCT tax rate for online bookmakers, later increasing it to 10% last year.
Striving for Equilibrium
Anthony Carbines, Minister for Racing within the Andrews government, argued that the suggested POCT increase would achieve the right balance, providing the horse racing industry with “long-term certainty” while additionally keeping Victoria below Queensland’s 20% tariff.
Carbines explained that these changes would ensure the industry’s funding from wagering and support jobs and events that generate millions of dollars annually across the state.
Welcoming the POCT Rate Increase
Tabcorp, a Melbourne-based gambling giant, and other industry members have welcomed the proposed POCT rate increase.
Tabcorp has accused several foreign-owned online sports betting firms of not paying their fair share of taxes.
Last year, Tabcorp’s CEO, Adam Rytenskild, joined Victoria’s anti-gambling lobby and pub industry representatives to call for a POCT rate hike.
A company spokesperson welcomed the recent announcement: “Tabcorp has long advocated for foreign-owned online bookmakers to pay their fair share of wagering fees and taxes to ensure the sustainability of racing industries across Australia.”
Mixed Reactions from Advocacy Groups
Tim Costello, the Chief Advocate for the Alliance for Gambling Reform, welcomed the POCT rise proposal despite criticizing the lack of a consistent national framework and the measure’s support for the local horse racing industry.
Costello called the proposal “cosmetic” and a “Band-Aid,” asserting that the revenue should not go to horse racing.
The Greens’ Alternative Approach
The Greens political party, which won 11.5% of the popular vote in Victoria’s recent parliamentary elections, proposed increasing the POCT rate to 20% without allocating the resulting revenue to support the local horse racing industry.
The Andrews government’s proposal also aims to eliminate the “no less favourable” requirement linked to the state’s 12-year retail wagering and betting license, awarded to Tabcorp in August 2012.
Embracing Long-term Funding Certainty
Brian Kruger, Chairman of Racing Victoria Limited, welcomed the POCT rate increase proposal to provide long-term “funding certainty” for the industry.
Kruger stated that funding certainty drives investments in events, programs, and infrastructure across the state, supporting jobs and ensuring the safety and welfare of animals and participants.
