Gambling Point Of Consumption Tax
The betting operations tax, effective from 1 July 2017, is a consumption tax of 15% on the Net Wagering Revenue (NWR) of betting companies offering services to South Australia. All bets placed in South Australia with Australian-based betting companies will be liable for the tax. Glossary of point of consumption tax terms From 1 January 2020, a point of consumption tax will apply to all betting operators licensed in Australia where their net wagering revenue (NWR) from Tasmanian bets exceeds the annual tax-free threshold. The POC tax rate is 15 per cent of the NWR and the annual tax-free threshold amount is $150 000.
- Point of consumption tax. Proposed section 13C provides that a betting operator is liable to pay point of consumption tax on the operator’s net NSW wagering revenue for a financial year. The tax is payable at the rate of 10% of the amount by which the net NSW wagering revenue exceeds $1,000,000.
- Failure to pay point of consumption tax results in the loss of the UKGC licence. The 2018 Amendment. In 2018, yet another amendment was made to the Gambling Act. As of October 2019, remote betting companies have to pay 21% tax on point of consumption on all games of chance.
- The point of consumption tax is calculated at 10 per cent of the net NSW wagering revenue that exceeds the financial year threshold for bets that are placed in NSW. Net NSW wagering revenue Your net NSW wagering revenue is calculated as the sum of the following. Taxable net wagering revenue.
Australian gambling behemoth Tabcorp revealed that the introduction of online betting taxes has restored “rationally” to the betting sector of Australia and is helping it be more competitive to the rivalry of online betting operators.
The company revealed that its lotteries and keno operations helped it compensate for the lower profits generated by its bookmaker division in 2018. It also shared that the TAB and Ubet brands of the operator were forced to offer some special incentives to customers in order to keep them interested and prevent them from betting with Tabcorp’s rivals.
As explained by the company’s Chief Executive Officer David Attenborough, the implementation of the so-called point of consumption tax in the Australian Capital Territory (ACT) and the states of Victoria, New South Wales (NSW) and Western Australia at the beginning of 2019 has helped Tabcorp face the competition from online bookmakers, including Ladbrokes, Sportsbet and BetEasy.
Our CEO David Attenborough gives his view on the highlights of our 2018/19 full year results, the key achievements for the year and thanks our people pic.twitter.com/MiVdYbuvvc
— Tabcorp (@Tabcorp) August 14, 2019
Under the point of consumption tax, which has already been implemented in Queensland and South Australia, gambling losses are taxed based on where bets are placed, rather than the territory where the company’s licence is held. The thing is that the majority of online bookmakers which currently operate in Australia have their licences issued by the Northern Territory authorities. The Northern Territory, however, has been known as a low-tax destination, which basically meant that Tabcorp’s online competitors have been paying considerably lower taxes than it.
Lottery and Keno Operations Help Tabcorp Deal with Online Bookmakers’ Rivalry
Tabcorp’s boss has explained that online bookmakers had been forced to act in accordance with the new rules in order to cope with the new taxes, which on the other hand, had made his company more competitive with them.
Today, the company announced a massive increase in earnings generated by its lottery operations, saying that they helped it deliver a full-year profit in line with preliminary expectations. As revealed by Tabcorp, the largest Australian gambling operator saw an 8.7% revenue increase to AU$5.482 billion for the year which ended on June 30th, 2019. The operator’s underlying earnings rose by the staggering 42.5% to AU$397.6 million.
We released our 2018/19 results this morning – the first full year for the combined Tabcorp-Tatts group. Read more here: https://t.co/9EXQGNtZfr
— Tabcorp (@Tabcorp) August 13, 2019
The lottery division’s earnings before interest, tax, depreciation and amortisation (EBITDA) were boosted by a series of big Powerball jackpots and price increase, but the truth is that Tabcorp is still facing some pressure from its competitors.
The revenue generated by the lotteries and keno operations of Tabcorp increased by 22.8%, while its EBITDA rose by 29%, reaching AU$509 million.
Currently, the Australian gambling operator is integrating its totalisator services in South Australia, Queensland and the Northern Territory with the TAB business in the states of NSW and Victoria. Mr Attenborough explained that the integration program is delivering for the company’s shareholders and also noted that the progress helped the company keep its overall expenses flat year on year, which is actually in line with Tabcorp’s plans.
- Author
Daniel Williams
The point of consumption tax is calculated at 10 per cent of the net NSW wagering revenue that exceeds the financial year threshold for bets that are placed in NSW.
Net NSW wagering revenue
Gambling Point Of Consumption Tax Exempt
Your net NSW wagering revenue is calculated as the sum of the following.
| 1. NSW totalizator bets | Total of all your NSW revenue from totalizator pools during the period. |
| 2. NSW betting exchange bets | Total of all your fees and commissions for NSW betting exchange bets. |
| 3. Other NSW bets | Calculated by: Total of all NSW bets, including bets placed at fixed odds and totalizator derived odds, and the face value of any free bet. plus Total fees and commissions associated with making the bets. less Total winnings paid or payable in relation to those bets, including winnings paid for free bets, but not including winnings paid in the form of credits or entitlements that can't be converted to money. less Total refunds paid or payable in relation to those bets, not including the amount paid or payable in credits or entitlements that can't be converted to cash. |
| 4. Unclaimed winnings for NSW bets | Amounts you're entitled to retain for unclaimed NSW winnings during the period. |
| 5. Other amounts | Amounts you're entitled to be paid in relation to unclaimed NSW winnings during the period. |
Taxable net wagering revenue
When preparing your monthly returns, calculate your net NSW wagering revenue and deduct the threshold entitlement for the financial year.
Calculating a free bet
The face value of a free bet (also a bonus bet) must be included when calculating your net NSW wagering revenue. Any amount reclaimed from a successful bet must not be included as part of total winnings.
Example 1: Customer A receives a free bet valued at $200, which results in zero winnings.
| Total other NSW bets | $200 |
| plus total fees and commissions | $0 |
| less total winnings | $0 |
| less refunds | $0 |
| Other NSW bets | $200 |
Example 2: Customer B receives a free bet valued at $200, which results in a gross win of $750.
The betting operator deducts $200 (value of free bet) from the gross winnings, resulting in a net winning of $550.
| Total other NSW bets | $200 |
| plus total fees and commissions | $0 |
| less total winnings | $550 |
| less refunds | $0 |
| Other NSW bets | -$350 |
Bets placed before 1 January 2019
Net NSW wagering revenue is calculated according to when a bet is placed and the cash received, not when an event occurs or a bet is settled.
Bets placed before 1 January 2019 aren't subject to point of consumption tax. Winnings from these bets can't be claimed as a deduction when calculating your net NSW wagering revenue.
Determining a customer’s location
| How bet is made | Customer's location |
|---|---|
| On course or in person | All bets placed from a venue within NSW are captured based on the location where the transaction takes place. |
| Online or by phone | All bets placed online or by phone are captured based on the physical location of the customer when placing a bet. |
You must take reasonable steps to identify the physical location of the person making a bet. You can rely on:
Gambling Point Of Consumption Tax Rate
- the residential address of the person making a bet
- the principal place of business of the corporation making a bet.
You must use an alternative address if you know or suspect the residential or business address isn't the physical location of the person making the bet. For example, where a customer discloses to the phone operator that they are currently in NSW and their residential address is in another state.
Liquor & Gaming NSW will undertake compliance activities to ensure that the customer’s address is accurate. Interest and penalty tax may apply where reasonable steps have not been taken to capture the physical location of the person making the bet.
GST and net NSW wagering revenue
Point Of Consumption Tax Gambling Uk
Net NSW wagering revenue is the GST inclusive amount.
Uk Gambling Commission Point Of Consumption Tax
Example
A betting service provider receives $5,000 in bets and pays out $4,000 in winnings. Point of consumption tax will be payable on $1,000.