Andrews government tipped to hike Point of Consumption Tax paid by betting companies that turn over more than $1m

Industry sources say a gambling tax increase is almost inevitable given a likely fall in the state’s next wagering licence fee and the perilous state of the budget.

The Andrews government is considering lifting a Point of Consumption Tax (POCT) paid by betting companies. Picture: AAP

The Andrews government appears set to hike a gambling tax that pumps tens of millions of dollars into the state’s racing industry, as jockeying over a new Victorian wagering licence intensifies.

The government is considering lifting a Point of Consumption Tax (POCT) paid by betting companies that turn over more than $1m from its current level of 10 per cent.

Industry sources believe Victoria could bring its system into line with NSW, which hiked its POCT last year from 10 per cent to 15 per cent to help ring-fence racing funding.

In Queensland, the same tax has spiked to 20 per cent, but a lower share of the money raised is distributed back to the sector.

Several sources said a Victorian increase was almost “inevitable” given a likely fall in the state’s next wagering licence fee, which is currently out to market, and the perilous state of the budget.

Jockeying over a new Victorian wagering licence is set to intensify. Picture: AFP

The wagering and betting licence, which is held by Tabcorp in a monopoly joint venture with the Victorian racing industry, includes the rights to operate retail betting shops, as well as betting systems in pubs and clubs.

The Andrews government opened a competitive process in 2021, with the potential for multiple licence-holders and for a period of up to 20 years.

There has been interest expressed by several betting companies as well as from Tabcorp, but a dispute has broken out about an existing Tabcorp customer database that it believes it owns.

When asked whether the state or the gambling giant owned the data, and whether legislation could be required to clarify the matter, Gaming Minister Melissa Horne did not directly respond.

A spokeswoman said because the process to award a new licence has begun, “this process and subsequent negotiations are commercial in confidence” so it would be inappropriate to comment.

NSW last year hiked its Point of Consumption Tax (POCT) from 10 per cent to 15 per cent to help ring-fence racing funding. Picture: AAP

A recent Credit Suisse financial report speculated Tabcorp would be expected to pay $500m for a new 20-year licence, with the assumption the POCT rises to 20 per cent.

Multiple sources said $500m would be a “bargain” given the previous licence was sold for $410m in 2012, for a 12-year period.

There is also internal jockeying over whether running multiple licences would affect the totalisator and the returns that flow to the industry.

About $200m a year goes towards harness, greyhound and thoroughbred racing from the revenue made under the current licence.

Opposition racing spokesman Tim Bull said the sector required urgent clarity about process and timelines, given the current licence expired next year.