Sports betting companies on edge

If Tax Stays the Same, the Funding Will Remain in Place

Online bookmakers won’t pull their funding, but only if tax stays the same.

The major companies controlling Australian sports betting have stated that they are committed to not winding back the multimillion-dollar investments and sponsorships they put in to Victorian Racing. The new digital tax on gambling will not affect these, according to wagering sources and racing officials.

Everyone’s On Edge

A wave of brand-new betting taxes by the state has caused nervousness within the wagering and racing industry. There have been warnings given by gaming analysts and business leaders that a big hunk of Australia’s corporate bookmakers who are only operational online are simply not turning enough profit to hit the margins they need to, and may consequently need to slash their sponsorship and marketing spends.

The Point of Consumption Tax

The brand-new, state-based Point of Consumption tax goes into effect all across Australia, and means that, for the first time in our history, betting companies like Bet365, Ladbrokes, Crownbet, and Sportsbet will see their revenue being taxed where the wagers are being placed on both the biggest and smallest races, rather than where they are licensed. In Victoria alone, the recently announced 8% tax, the lowest of all the states so far, is likely to generate over AU$30 million a year.

Critical Support Will Continue

Giles Thompson, however, the Chief Executive for Racing Victoria, stated this week that many of the bookmakers had given an undertaking to the three Racing Codes that their support of the industry would be maintained, as long as the tax rate in Victoria stayed at 8%.

The biggest service providers have pledged to continue their vital support of, and investment in, the racing industry in Victoria, according to Thompson. This includes promotion and support of all three codes as the main wagering products on the platforms the wagering service providers own, along with assets of the industry media like Racing.com and agreements on club sponsorships.

Wagering sources have stated, however, that this commitment was made on the condition that the

Point of Consumption tax stayed at 8%. If it goes any higher than this, all bets, as they say, are off.

Online sportsbooks have arrangements in place to live-stream Thoroughbred racing in Victoria on their digital channels, which delivered AU$14.4 million in rights fees to the industry in the financial year for 2017.

They are also big partners in the media assets belonging to the racing industry, and there are even those that have commercial partnerships in places, like race sponsorships and naming rights with Thoroughbred racing clubs like the Ladbrokes Cox Plate, the Crownbet Balnarring Cup, and the Sportsbet Ballarat Cup. These sorts of agreements are what would come in to question should the tax rise above the 8% currently in place.

Category: Betting