Single National Gambling Tax Scheme

Through a Better Tax Discussion Paper submitted to the Australian Taxation Review Committee, National Party Senator for Victoria, Bridget McKenzie pointed out the inequality and complexity of the laws governing Australia's gambling industry. Her objective is to urge the federal government to introduce a single and reliable tax regime in order to promote enhanced tax efficiency as well as ensure the preservation of economic and social interests on a national scale.

The Victoria Senator remarked that the sportbetting industry in Australia is the fastest growing market. Yet as it is, the industry is minimally taxed. The present system requires sportsbook operators to obtain licences in each of the eight jurisdictions, if they wish to do business in all. Senator Mckenzie asserts that the present system is not only burdensome on sportsbook operators, but also tax inefficient as all eight regulators spend tax money to carry out regulatory duties on the same thing.

She explained that the existing state-based taxation system has today, become increasingly irrelevant due to the advent of Internet gambling. Citing as example a scenario in which punters in New South Wales (NSW) could place bets on Victorian races, via a Tasmania-facing online gambling facility. The current system leaves the Victoria and the NSW government powerless to require payment of fees or collect extra royalties from the Tasmanian wagering transaction, as the bet was placed via the Internet, albeit with a Tasmania-registered gambling facility operator.

Adding complexity to the current system is the premise that there are three types of operators, the on-track or on-course bookmakers, the off-track or off-course operators, and the totalisers. All three types are governed by different regulatory bodies, and subject to varying sets of licence conditions.

Most relevant to Senator McKenzie's call for corrective tax, are the different duties imposed on bookmakers by each state or territory, which she listed down as follows:
• NSW collects a 1.5 percent tax on net turnover;
• Victoria imposes a 1.5 percent tax on net winnings gained from thoroughbred racing, and 0.66 percent from harness racing;
• ACT and Western Australia levy a 1.5 percent tax on betting turnovers;
• The Northern Territory collects the least, at 0.33 percent on net turnover.
• South Australia collects 13 percent tax on gross revenue and one percent levy on net turnover
• Queensland's system is more complex, as the state collects tax on revenues greater than 20 percent of the gross revenue and one percent (1%) of net customer winnings;
• Tasmania's is the least complicated as the state does not impose a gambling turnover tax, but instead collects a straightforward flat fee of AU$256,000.

Other aspects that tend to complicate the systems even more are rates that depend on the betting format, whether realised from betting exchange, phone betting, tote, or from rail operations, as well as on the type of betting, such as traditional or exotic, and in some cases depending on the time of year.

As a result corporate gambling entities tend to set up their business in a state or territory that imposes lower dutie , and in some cases, in jurisdictions that offer tax incentives as means of enticing the betting company to incorporate within their territorial boundaries. After all a nationwide coverage is still possible, as they can simply offer their betting products and services online.

In light of those complexities, NP-Victoria Senator McKenzie recommends for a modified system of regulation to ensure Australian punters place wagers only on Australia regulated betting facilities. A single federal taxation system would also ensure that all betting operators across all Australian states and territories, would pay fair and equitable taxes, based on equal terms. Most importantly , a unified taxation system would make certain that problem gambling programs in all jurisdictions are well resourced.