Victorian point of consumption tax for wagering and sports betting

Victoria has passed legislation to introduce a point of consumption tax (POCT) for wagering and sports betting.

The Gambling Regulation Amendment (Wagering and Betting) Act 2018 received Royal Assent on 25 September 2018 and will come into effect on 1 January 2019.

The Victorian POCT will be payable by wagering and betting operators on the revenue derived from wagers and bets of customers located in Victoria.

There are several types of wagering and betting products that can be offered in Victoria, including pari-mutuel (totalisator), fixed odds, simulated racing (Trackside) and betting facilitated by a betting exchange or other commission-based agent.

The POCT will apply at a rate of eight per cent of the net wagering revenue derived from all wagering and betting types. For bookmaking operators, net wagering revenue is calculated as monies staked minus winnings paid.

As a result of this change, Tabcorp, which holds the exclusive Victorian wagering and betting licence, will pay eight per cent tax on all net wagering revenue, instead of the current arrangements where different betting products are taxed at different rates.

Online bookmakers licensed interstate will be required to pay eight per cent on net wagering revenue of Victorian-based account holders.

The POCT will apply to operators whose annual net wagering revenue exceeds a $1 million threshold. As a result, most Victorian on-course bookmakers will not be required to pay the POCT.

The POCT is forecast to raise $30 million a year. The government will contribute 1.5 per cent of taxable net wagering revenue to the Victorian Racing Industry (VRI). The remainder of the revenue collected will go to the Hospitals and Charities Fund.

On 1 January 2019, New South Wales will introduce a 10 per cent POCT, and Western Australia and the ACT a 15 per cent POCT.

South Australia and Queensland introduced a 15 per cent POCT on 1 July 2017 and 1 October 2018 respectively.

A statutory review of the Victorian POCT will be undertaken within 18 months of commencement by the Treasurer, in consultation with the Minister for Consumer Affairs, Liquor and Gaming Regulation, the Minister for Racing and the VRI.

Read more about the Point of Consumption Tax.