South Australia reels over bookmaker’s economic sucker punch

South Australia is feeling the pinch of online betting giant Sportsbet’s decision to throw away the $20 million high-tech data facility project plan in Adelaide in protest of the 15 percent tax on online betting revenue.

South Australia reels over bookmaker’s economic sucker punchReeling in pain, South Australia’s Council of Social Service (SACOSS) whined about how “outrageous and unsporting” Sportsbet was when the bookmaker pulled out its investment in the state in protest of the tax plan.

SACOSS is now urging the government to push on with its new point-of-consumption tax as an act of revenge toward Sportsbet. It argued that the bookmaker chalked up a net revenue of $470 million last year – a 41 per cent increase on the previous year and a profit increase of 54 per cent.

“It [Sportsbet] was hugely profitable operation, and their reaction to this proposal to close their use of a virtual tax haven is outrageous and unsporting” SACOSS acting CEO Greg Ogle said, as quoted by local news website In Daily. “It is an absolute dummy spit.”

“The proposed wagering tax is an important way to ensure that profits from South Australian betting are taxed in SA, and can be directed to services for South Australians – including support for the problem gamblers that live here and not in virtual tax havens where corporate bookies may choose to nominally reside.”

In July, the state government introduced a 15 percent “place of consumption” tax, as part of the National Tax Reform process, on “the net wagering revenue of all betting companies offering services” in South Australia. This means any bets placed in the state with Australian-based gambling companies will be subject to the tax.

SA’s move prompted bookies, including Sportsbet, to push back against the unfair online betting which they called a “shortsighted money grab.” In protest of the new tax, Sportsbet pulled the funding for the proposed data hub and terminating its ongoing sponsorship of the Gawler Racecourse.

Ben Sleep, CFO of Sportsbet, defended the decision of the company to scrap its plan to build a high-tech data facility in Adelaide, saying that the company “cannot invest tens of millions of dollars into a state where its Government has shown that it is willing to significantly move the goal posts without consultation with those most affected.”

The data facility project, which would have supported other such facilities in Darwin and Melbourne, and delivered millions of dollars of ongoing investment each year through maintenance, servicing and enhancements, will now be redirected to the Northern Territory, according to Sleep.

“The South Australian Government’s decision to introduce its Punters Tax without industry consultation has created significant uncertainty, with South Australia now considered a high-risk investment destination for any Australian-based bookmaker,” Sleep said. “We are really disappointed to end our association with Gawler, and while we remain committed to supporting regional racing across Australia, sadly it won’t be in SA.”