Tabcorp has turned defiant in the attempts to have the Australian gaming company pay more taxes. Racing Queensland already receives around US$118.7 million a year, but a recent decision altered an existing agreement and would force Tabcorp to shell out more money from its pockets. The two sides have been in deliberations to determine exactly what needs to legally be paid and, after unable to reach a solution, Tabcorp is holding its ground. This has forced Racing Queensland to seek other methods of forcing Tabcorp’s hand, and is going after the company in court.
Racing Queensland lodged an official suit with the Supreme Court of Queensland last Friday. The suit wants the courts to force Tabcorp to compensate for damages and additional relief in connection with two agreements between the racing authority and UBet, a Tabcorp subsidiary in Queensland.
The amount of money Racing Queensland is seeking will most likely run in the millions of dollars, which is what it has asserted it is owed by Tabcorp. The dispute comes via a “point of consumption (POC) tax” that was introduced at the beginning of the year. The tax has been in dispute for how it is to be assessed, and Tabcorp isn’t going to give up without a fight.
In a statement submitted to the Australian Stock Exchange, Tabcorp stated, “The company understands that the dispute relates to the calculation of fees following the introduction of point of consumption tax in Queensland,” Tabcorp said in a statement lodged with the ASX. The company is currently reviewing the issues raised and the relevant legal claims made by Racing Queensland and will update the market in due course. Pending further analysis and review the company expects to defend its position vigorously.”
The POC tax was designed to be a tax on operators in an effort to improve states’ revenue. However, as with any new business tax implemented anywhere in the world, the sting will most likely be felt more by consumers than the companies. After the tax was first announced, Ladbrokes Australia CEO Jason South indicated that odds would become less generous in order to recuperate the losses incurred by the tax. He added, “In the end, this will end up being a tax on punters, not on operators.”