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The Guardian - AU
The Guardian - AU
National
Eden Gillespie

Online bookies say Queensland betting tax increase could end up stripping $1.75bn from state’s revenue

General view of the field in race 2 the Birdsville Races Roadies class 3 plate during the 140th anniversary of the Birdsville Races. Two jockeys on two horses
Justin Madden says the Queensland treasury’s projections of a roughly $80m increase in funding from the tax are off by at least $50m. Photograph: James Ross/AAP

Australia’s peak body for online bookmakers has sought to pressure the Queensland government over its bid to widen its betting tax, claiming it “does not account” for measures companies may take that could strip $1.75bn from the state’s racing revenue.

The chief executive of Responsible Wagering Australia, Justin Madden, on Monday slammed the decision to increase the point of consumption tax during a parliamentary inquiry.

He said plans to raise the tax from 15% to 20% on 1 December would disadvantage RWA’s members, which include Ladbrokes, Sportsbet and PointsBet.

The Queensland treasury projected that Racing Queensland would receive approximately $80m in annual funding.

Tabcorp, which will be better off under the reforms, will cancel its agreements with the state racing body, meaning the company will pay a lower proportion of revenue to the industry and state government.

But Madden said he believed the state government’s budget projections were inaccurate by at least $50m.

“The major policy decision was announced without any prior consultation whatsoever with RWA or our members and follows, we understand, 40 meetings between the government … [and] Tabcorp,” Madden said.

“As a consequence of this lack of full consultation with industry, the decision was regrettably taken with an absence of key facts about the economics of wagering and racing in Queensland.”

He said since the increased tax was announced, some bookmakers have “substituted Queensland racing with racing products offered by other jurisdictions”.

“It’s also a belief that, if all major corporate wagers [had] made their own decision to fully mitigate the cost of the Queensland government’s decision, somewhere in the order of $1.75bn in Queensland racing turnover would be lost just in the next two years.”

Madden’s comments come after Ladbrokes deprioritised Queensland horse races from its mobile apps and axed a $7.5m Brisbane Broncos sponsorship in response to the increased betting taxes.

Sportsbet also pushed down the state’s races on its app – a move it has since reversed after making a deal with Racing Queensland.

In August, Tim Costello, an advocate from the Alliance for Gambling Reform, said it was not surprising to see bookmakers push back against the tax increases.

“We’ve been very blind to the political muscle and state capture by gambling interests here in Australia,” Costello said. “They have transformed their wealth into political power.”

Tabcorp welcomed the decision over the tax on Monday, saying it had fought online bookmaker rivals for years with “an arm tied behind its back”.

Its chief executive, Adam Rytenskild, told the inquiry Sportsbet’s parent company Flutter Entertainment is a $30bn global company – about 15 times the size of Tabcorp.

“Our competitors have foreign-owned bookmakers licensed in the Northern Territory … They are domiciled in tax havens such as Dublin and the Isle of Man to minimise their tax liability,” Rytenskild said.

“They’ve rapidly grown their market share, and currently they capture about 75% of Queensland’s digital wagering market. Yet they don’t pay their fair share of tax to ensure a sustainable and well-funded Queensland racing industry.”

Madden hit back at that claim, saying RWA’s members “pay [a] significant amount of tax in this country”.

But Rytenskild said Queensland’s racing industry has been underfunded and the regulatory framework has not kept pace with changes in the market.

“Whilst many Queensland businesses suffered through Covid, foreign-owned bookies like Sportsbet and Ladbrokes shipped more than half a billion dollars of profits out of Australia,” he said.

“It’s in part because [they] paid less tax. This money should be going back into Queensland jobs, Queensland industries and Queensland communities.”

A spokesperson for Queensland’s treasurer, Cameron Dick, said the changes will “ensure that all participants in the wagering industry in Queensland pay their fair share”.

“As the size of the overall market grows, so too will the revenue generated by the [tax].”

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