CANBERRA: The end of Betfair in Australia has been mooted as a possible outcome of the implementation of a widespread Punters’ Tax in Australia, according to one industry expert.
The Punters’ Tax, or point of consumption tax, is set to be rolled out by all states in Australia in the coming two years, with South Australia already charging bookmakers a 15 per cent tax on profit on customers in that state and Western Australia to follow suit in 2019.
The 15 per cent tax rate has been widely condemned as excessive by the industry, but the prospect of a turnover tax model in New South Wales is far worse with the likely demise of betting exchange Betfair.
Betfair acts as a key lubricant to the market in Australia, giving increased liquidity and ensuring bookmakers offer fair and reasonable prices.
But Richard Irvine, who has over 20 years’ experience in the bookmaking and betting industry, believes the exchange would be unable to sustain its business model in Australia if a turnover tax is introduced in Australia’s biggest state.
“I think Betfair can withstand a small POC tax on profit, but the NSW Govt. have mooted a 2% on turnover POC tax. If this happened it would mean Betfair would have to pay over 100% of their racing revenue and over 200% of their sports betting revenue in fees and taxes. So it would be LIGHTS OUT!” Irvine wrote in a column criticising the tax on Punters.com.au.
“Betfair have the most at stake in the POC tax debate. They already pay 50% of their gross revenue in product fees and taxes whereas Sportsbet pay 25%. A 15% POC tax would take Betfair up to 65% of their revenue gone in fees and taxes, and that’s before they’ve paid any of their operating costs.”
Irvine said the heart of the betting system in Australia would be ripped out if Betfair was forced to walk away due to overly burdensome tax and regulation. And the biggest losers would be punters.
