Online Gambling Tax Australia

Online bookmakers, such as Sportsbet, BetEasy and Ladbrokes Australia, only had to pay the NT government wagering taxes up until July 2017 when South Australia first introduced its POC tax. It works by taxing betting operators based on where a customer places a bet, instead of where the bookmaker is licensed. The betting sector in Australia has been struggling overall lately. Online sportsbook operators in particular have been hit hard by a new point of consumption tax. Bettors may end up bearing the brunt of these increases, with odds being slashed.

The South Australian Council of Social Service is today calling for sweeping changes to the taxation of online gambling to remove the abuse of tax havens in Australian betting.
Sports betting is Australia’s fastest growing form of gambling, and it is taxed by the jurisdiction where a betting company is licensed, not where the bet is actually placed or where the sports event is being held. Gambling corporations are therefore free to ‘jurisdiction shop’ to get licensed, with the result that the Northern Territory and Norfolk Island are operating as virtual gambling tax havens.
International bookmakers Sportsbet, Bet365 and William Hill are all registered in the Northern Territory – helping the Territory to clock up 32% of Australian sports betting expenditure. South Australia has just 1.6% of the national sports betting market.

But these figures don’t take account of Norfolk Island which has had its own licensing system and attracted one of the world’s largest betting corporations, Ladbrokes, and a range of smaller bookmakers.

Online Gambling Tax Australia

Online Gambling Tax Australia 2019

Norfolk Island caps gambling taxes at $300,000 per year per licence – a very small amount for a global betting company. The Northern Territory cap is $500,000pa, while SA has potentially higher effective tax rates with no cap.

SACOSS CEO, Ross Womersley says, “Sports betting is already lightly taxed by comparison with poker machines and lotteries, but the use of virtual tax havens by gambling companies means that they are paying next to nothing to South Australia while our community has to pay for the damages caused by problem gambling”.
“When a gambling corporation does not have to be incorporated or resident in a jurisdiction, but can still use the licence of a jurisdiction like Norfolk Island to lessen their taxes, I think we have gone beyond real business and are talking about virtual tax havens and (legal) tax avoidance.”

“After the leak of the Panama papers, the world is well aware of the issue of corporations gaming tax systems to their advantage, but here we have Australian governments being complicit in behaviour which undermines our tax base and the ability of governments to pay for vital services.

“We need to move to a system of ‘point of consumption’ gambling taxes where expenditure is taxed where it is spent, not where some corporate licence is nominally held.
Point of consumption gambling taxes were flagged in April last year, and the South Australian government was to lead national conversations, but there is no national agreement and so we see gambling tax havens flourishing.

'This is a regrettable but clear example of the negative consequences of competitive federalism when states and territories race to the bottom to attract business at the expense of the tax base,' says Womersley.

SACOSS will release a major report on gambling taxation in the next month.

Australian Online Gambling Tax

In Australia, the Interactive Gambling Act (2001) governs the rules and laws about online gambling. This is a national law and that was first enacted in the Australian Parliament on June 28, 2001. The Act targets online gambling operators. And makes it an offence for them to offer ‘real-money’ online interactive gambling to residents in Australia.

Online Gambling Tax Australia Online

Australian online gambling taxAustralia

That hasn’t done much to stop Australian’s spending big online, with $800 million spent by 2010. Accessing and using interactive gambling services is not an offence in Australia. It is also permitted for companies based in Australia to offer their services to gamblers located outside Australia. The only exception being those countries that were called ‘designated countries’. Australian punters benefit from not having to pay tax on their gambling winners. However, when it comes to online gaming, there aren’t many Australian providers.

Online Gambling Tax Australia Tax

Online gambling tax australia tax

Since few are actually based in Australia, there is a foreign transaction fee that some users will have to pay to make a deposit or withdrawal. This is dependent on what kind of banking method you use.

Online Gambling Tax Australia 2020

For example, Mastercard and Visa will generally charge a foreign transaction fee. Whereas Skrill, won’t charge one. There is also the issue of currency conversion. As some of the best casinos available might not offer the option to play in the Australian dollar.