Shake-up for Queensland wagering taxation
POC tax increased to Australia-high 20 per cent to help fund state’s racing industry
The Queensland government has undertaken the biggest shake-up of wagering taxation in decades, axing the myriad of separate agreements it had in place, and instead simplifying the racing industry’s major revenue stream by making betting companies all pay the same rate on turnover.
Yesterday’s landmark deal will see the current complex and convoluted agreements scrapped, leading to Queensland’s betting revenue sourced from an increased Point of Consumption Tax (POC) – lifted from 15 per cent to an Australia-high 20 per cent – and the current race field fees imposed on wagering service providers including Racing Queensland’s major partner Tabcorp.
For the first time in Queensland, the tax will also apply to bonus bets offered to punters by bookmakers in an attempt to entice them to bet.
The Palaszczuk Labor government will also increase the state racing body’s share of the tax on punters from 35 per cent to 80 per cent, it was announced yesterday, potentially leading to an increased spend on racing infrastructure and prize-money.
However, the planned legislative changes, which are expected to come into effect on December 1, are not a simple add-on to racing’s revenue, with some of Queensland’s betting taxes being axed and covered by the extra POC levy.
Racing Queensland will also reap an immediate $150 million windfall from its principal wagering partner Tabcorp, which agreed to settle a more than three-year dispute over POC taxes the regulator believed the betting giant was liable to pay.
Fifty million dollars of the backdated payment will be reserved for investment in infrastructure projects by Racing Queensland across the three codes of thoroughbred, harness and greyhound racing.
A Racing Queensland spokesperson described the shake-up of the wagering taxes as “a positive for the Queensland racing industry and its long-term sustainability”.
“Since the onset of Covid-19, Australia has experienced an abnormal trading environment, with lockdowns, reduced sporting content and restricted travel all contributing to increased wagering and digital consumption,” the spokesperson told ANZ Bloodstock News yesterday.
“During this time, WSPs have been aggressive with their gratuities (bonus bets) and customer acquisition strategies, benefiting from the disparity in their licencing costs compared to the premium that TAB has paid through its higher share of wagering revenue.
“The tax reform applies consistently to all WSPs, ensuring they all pay the same rate and creating an environment where Racing Queensland can reinvest through industry funding, infrastructure enhancements and prize–money increases.”
Tabcorp managing director and chief executive Adam Rytenskild claimed the new agreement was “great for clubs, great for local and small business and it’s great for racetracks right around the state and a stronger TAB is great for punters as well”.
“On a relative basis, TAB currently pays double the fees to the local racing industries compared to other wagering operators. Going forward we will all pay the same in Queensland,” Rytenskild said.
Tabcorp will still offer on-course betting services and it retains exclusivity for retail wagering in Queensland until at least 2044 under the new deal, but now the wagering giant will pay the same rate of taxation on betting as its rivals.
Queensland treasurer Cameron Dick suggested the move was “levelling the playing field” for the more than 50 Australian licensed corporate and online wagering operators such as Sportsbet, Ladbrokes and Bet 365, as well as Tabcorp, and the growing cohort will now be allowed to sponsor the state’s racing clubs once the changes come into effect later this year.
Previously, Tabcorp had held exclusivity over sponsorship of the racecourses in Queensland.
“This means race clubs across Queensland will have opportunities to enter into new sponsorship agreements with other wagering service providers,” Queensland racing minister Grace Grace said.
“Other benefits of the agreement include a further injection of $50 million from Tabcorp to cater for future racing infrastructure needs, and a one-off payment of $100 million to Racing Queensland.”
The announcement coincides with Tabcorp revealing to the Australian Securities Exchange prior to trading opening yesterday that it had settled a three-year legal dispute between the gaming company and Racing Queensland concerning the calculation of fees payable by Tabcorp following the introduction of POC tax by the state government.
As a result of the litigation settlement, the Queensland Product and Program Agreement between TAB and Racing Queensland will cease and the Queensland TAB will begin paying POC tax and race field fees in line with all other licensed wagering service providers.
In recent years the Queensland government has underwritten prize-money for the state’s extensive non-TAB racing circuit but the new deal will see the funding of country racing fall under the auspices of Racing Queensland and the costs generated from wagering turnover.
“Racing Queensland’s purpose is to champion great racing and events which connect Queensland communities and our non-TAB clubs play a pivotal role in that space,” the Racing Queensland spokesperson said.
“On an annual basis, 85 communities host a race meeting that is either the biggest or second largest event for the year. Funding for the non-TAB sector is now secured with the existing Country Racing Program scheduled to conclude at the end of financial year 2023.
“In conjunction with the Country Advisory Panel, RQ will make further announcements on prize– money, industry funding and infrastructure investments ahead of the implementation date. This includes continuing to explore non-TAB to TAB conversions as we have seen in country race clubs across Queensland including Thangool (which conducted a TAB meeting yesterday).“
The demerged Tabcorp Holdings, which no longer includes its lotteries business The Lottery Corporation, was up 5.3 per cent yesterday, closing at 99 cents a share.