Proposed Punters’ Tax will have a serious impact on Australia’s racing industry

A LEADING betting executive has warned a Punters’ Tax will have serious ramifications for the racing industry in Australia.

The proposed tax will have serious ramifications for the racing industry.

ONE of Australia’s leading betting executives believes the looming Punters’ Tax will be an “earthquake” which could threaten the future prosperity of racing in Australia.

States around the country are considering following South Australia and Western Australia’s lead and introducing a Point of Consumption tax of anything up to 15 per cent on profit, punters.com.au reports.

A leading advocacy group has already expressed its concern about the likelihood of a state-based Punters Tax, saying it would lead to a tougher marketplace for the everyday punter.

And now Cormac Barry, the outgoing CEO of leading corporate bookmaker Sportsbet, has added his weight to the push for the major states, especially NSW and Victoria, to show restraint in implementing any new tax.

Speaking to Racing.com’s After The Last program, Barry said the tax burdens on corporate bookmakers were already high and an additional 15 per cent would have a significant effect on businesses.

“I think the Point of Consumption tax needs to be considered very, very carefully. The rates that are being proposed are huge,” he said.

“We are talking about paying 15 per cent of revenue on a point of consumption tax on an industry where we already pay 10 per cent sales tax through GST and we pay another 25 per cent in product fees.”

“We are going to be paying away 45 per cent of our revenue and that’s a tough business model for any industry.”

While it is little surprise that a corporate bookie would oppose the tax, Barry is adamant that the impact will not just be on companies like Sportsbet, with the knock-on effect to the racing industry likely to be massive.

Cormac Barry has cautioned over the implementation of the tax.

“There is a risk here that we kill the golden goose and that competition goes out of the industry and that then hurts racing,” he said.

“I think people are underestimating that this is an earthquake. And I know people have said before that the corporates have cried wolf before on product fees and we are always moaning about the latest change, but this is different.

“It puts taxation here higher than anywhere else in the world.”

Barry predicts the long-term impacts of a high POC tax would see the relationship between the racing industry and government change significantly.

“The racing industry really needs to think how this plays out in the future,” he said. “At the moment, the racing industry can set product fees at a price it sees fit and they control their own funding and their own destiny. In a world where you have high point of consumption taxes, it’s very hard to increase product fees.

“You could end up in the situation where racing was at 10 or 20 years ago where you are continually begging the government for funding.”

Barry has proposed a much lower base for the POC tax to begin with.

“I really genuinely think that governments should proceed cautiously and start low, and if the world doesn’t end, put it up, but starts high and you could really destroy a lot of value,” he said.

“I think it is appropriate that we do contribute to state governments. So I think the principle is fine, but I think it would be much more appropriate to start at five per cent or seven per cent than jumping to 15 per cent.”

This article first appeared on punters.com.au and was republished with permission