South Australia urges states to adopt new online betting tax

TAGs: Australia, south australia, Tabcorp, Tatts Group

south-australia-online-betting-taxAustralian betting operator Tabcorp Holdings isn’t taking chances that an interloper could spoil its plans to merge with rival Tatts Group.

On Friday, Tabcorp announced that it had taken a roughly 10% stake in Tatts via a cash-settled equity swap with investment bankers UBS that gives Tabcorp certain voting rights. The purchase appears intended to ward off any competitors that might try to make their own acquisition play for Tatts.

In October, the two companies announced plans to join forces to create an Australian betting monster with annual revenue of over AUD5b. Our own Rafi Farber slammed the merger as a nakedly anti-competitive move intended to create a single booming voice with which to badger the government to impose further restrictions on Tabcorb/Tatts’ online rivals, most of which are local divisions of international firms.

Those online bookies have already protested the apparent carveout that Tabcorp and Tatts received via the ban on online in-play betting contained in the proposed amendments to the Interactive Gambling Act (IGA) 2001, which the two domestic firms had long pressed the government to implement.

Australia’s state and territory ministers agreed to the proposed IGA changes – which include explicitly outlawing online casino and poker, domain- and payment-blocking of international sites and a ban on credit betting – at a Thursday meeting with federal government representatives.

Thursday’s meeting also saw South Australia treasurer Tom Koutsantonis pitch his counterparts on adopting the same ‘place of consumption’ tax his state will impose as of July 1, 2017. The new rules will require online operators to pay 15% tax on all revenue derived from South Australian punters, regardless of where the operator is located.

Koutsantonis urged his counterparts to mimic his state’s approach, which he said was intent on “capturing revenue from the super profits of companies in the jurisdiction in which they are doing harm.”

However, SA Council of Social Service chief Ross Womersley told InDaily that while other jurisdictions “would be foolish not to move pretty quickly” to follow South Australia’s example, they may wait to see “whether or not the big betting agencies challenge this in courts – which is entirely likely.”

Tabcorp and Tatts have long protested the fact that online bookies, most of which are licensed in the Northern Territory, aren’t subject to the same oppressive level of taxation. Given that their merger is expected to conclude around the time that South Australia’s new tax kicks in, it’s shaping up to be a summer of schadenfreude for Australia’s domestic bookies.


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