Online Betting Tax

The Hon. T.J. STEPHENS (15:32): I rise today to speak about the government's proposed wagering 'place of consumption' tax. On an empirical level, it is very disappointing to see that the government's solution to everything seems to be further taxation. Another tax is not what this state needs. In fact, a more efficient taxation system would improve the economic system here dramatically, but I diverge. This unimaginative Labor government has decided that it will cure its budget disease with more revenue, rather than doing the hard yards to reduce the entire public sector to a sustainable and necessary size. The newest idea to raise revenue is a 15 per cent tax on every online bet taken in South Australia.

As would be expected, the businesses involved are outraged by an opportunistic money grab without prior consultation. The Treasurer admitted this in his budget speech, where he declared that the government would consult the measure over the next six months. This appears a lot like the 'announce and defend' tactics of the Rann Labor government, rather than the 'consult and decide' promised by the Premier when he came to office. Perhaps the Premier no longer controls the government, given all the scandal that he has attracted recently.

There are a number of identified problems with such a measure, which I will endeavour to outline. My understanding of the measure is that it will only apply to Australian online bookmakers, which of course will only see punters move to online bookmakers based overseas who are outside the reach of the South Australian government, as they will not have to pass the cost of the tax on to punters and presumably can therefore offer better odds.

The Treasurer has stated that this measure is about the companies paying their fair share of tax, but the companies already pay GST and company tax to the commonwealth as well as other business taxes in the jurisdiction in which the company is registered. These companies do not dodge their obligations. This is about a greedy government saddled by unprecedented levels of public debt. The Treasurer further stated that this measure will ensure funding is committed to gambling rehabilitation programs at the same proportion as other state gambling taxes, but what exactly is that proportion?

According to SACOSS's 'Losing the jackpot' report, which first called for a place of consumption (POC) tax on online betting, only 12 per cent of gaming tax revenue is diverted to the four funds identified under the Gaming Machines Act of which the Gambling Rehabilitation Fund is only one. Clearly, that defence of the tax is spin at best.

Online bookmakers based in Australia currently pay product fees to the governing bodies of the events on which they run betting markets. However, offshore bookmakers do not. As their competitive edge increases, these offshore operators will be taking more and more of the Australian betting market and have a greater interest in Australian sport, without the same scrutiny that Australian operators receive. This could have serious repercussions on the integrity of the events, with the advent of complex spot-fixing schemes being exposed in many sports in recent years.

Furthermore, there is a risk that, should bookmakers choose to pass on this tax to punters by withholding 15 per cent of winnings, for instance, suddenly everyday South Australians are being robbed. It is an outrageous thought that, on Melbourne Cup Day, a South Australian punter would receive 15 per cent less of his winnings than a Victorian punter. This anticompetitive move by the government will only open the door for illegal gambling to operate in this state.

Finally, this measure will have an actual effect on competition, investment and jobs in South Australia. By introducing this tax, the government has heightened the sovereign risk to companies such as Sportsbet and bet365. Sportsbet is reviewing its proposal for a $20 million data centre in Adelaide as well as the technology scholarships it offers university students in this state. Bet365 has stated that it is considering withdrawing from the South Australian market altogether, which would significantly reduce competition and, therefore, the integrity of online betting markets.

I am interested to hear what the racing industry, which relies more heavily on gambling investment than most other sports and events, believes but, if any of the warnings of these online bookmakers are to be believed, it could mean more harm to an industry that this Labor government has failed to support year after year. It is disappointing that the government has buried this measure in the budget, as it deserves the full scrutiny of the parliament. This is another disappointing example of the Weatherill Labor government's incompetence.