Betting operations tax revenue options

Department of Treasury and Finance has released a report prepared by SACES regarding the revenue impacts of the Betting Operations Tax (BOT).

The BOT was introduced in South Australia in 2017 and most Australian States have since introduced BOT’s of their own or plan to do so. A key feature of the BOT is that it collects taxes from wagering service providers (WSPs) wherever they are located, with the tax liability in South Australia based on all wagering by South Australian residents wherever the WSP and betting event is located.

The SACES report was commissioned by the Department in response to representations from the South Australian racing codes that they have been adversely affected by the introduction of the BOT. The codes presented the Government with a study prepared by the wagering services industry body Responsible Wagering Australia (RWA) which argued that a cut in the BOT rate would increase SA Government tax collections.

South Australia’s BOT rate is set at 15 per cent of net wagering revenue subject to a $150,000 threshold. SACES modelled the impacts on Government tax collections from WSPs other than the SA TAB if the BOT rate was reduced from 15 per cent to 10 per cent and from 15 per cent to 8 per cent.

SACES’ modelling results are in stark contrast to RWA’s results. SACES finds that the most likely consequence of reducing the BOT rate would be to reduce South Australia’s BOT collections from non-SA TAB WSPs quite substantially.

SACES concludes that “The RWA argument that a BOT rate reduction would boost South Australian Government BOT revenues implies that everybody can win from a BOT rate reduction. But on the available evidence RWA’s position is simply not plausible”. 

The report was released by the Department of Treasury and Finance on 7 June 2019.

It was co-authored by Jim Hancock, Suraya Abdul Halim and Owen Covick.