Pubs and clubs back Tabcorp in push for updated tax regime

Tabcorp has secured the backing of the influential hotels and clubs lobbies in NSW and Victoria as it pushes for better tax treatment for its wagering business.

Queensland earlier this week became the first state to make significant changes to the wagering licence regime, lifting the point of consumption tax to 20 per cent.

Tabcorp has secured the backing of the influential hotels and clubs lobbies in NSW and Victoria as it pushes for better tax treatment for its wagering business.

Queensland earlier this week became the first state to make significant changes to the wagering licence regime, lifting the point of consumption tax to 20 per cent.

That change is expected be a boon for Tabcorp, with a reduction in other fees and taxes to hand the company around $30m annually, analysts forecast.

But online bookmakers will be left worse off, having to pay a larger share of taxes than they had before. In Queensland, they had paid only 15 per cent point of consumption tax.

Tabcorp, the Australian Hotels Association, Community Clubs Victoria and Clubs NSW will on Thursday launch a campaign to lobby for similar changes in other states. That campaign will target major online bookmakers including Entain – which owns Ladbrokes – and Sportsbet. The NSW and Victorian point of consumption tax is currently 10 per cent.

Tabcorp argues that it is paying double the fees and taxes, which is also making pubs and clubs less competitive compared with wagering using mobile phone apps.

Tabcorp CEO Adam Rytenskild. Picture Matthew Poon.

Tabcorp chief executive Adam Rytenskild told The Australian that the new group was established to “call for a level playing field in wagering taxes and product fees”.

“Foreign-owned bookmakers pay less taxes and fees. That means the racing industry does not receive the investment it should,” Mr Rytenskild said.

“Online betting has changed the market substantially since TAB licences were issued.

“TAB is paying double the fees of foreign-owned operators, which was OK in a monopoly environment but not now.

“The market share of online operators has increased and they should be contributing the same level of funding to ensure the sustainability of the racing industry.”

Responsible Wagering Australia, which represents the online bookmakers, this week described the Queensland tax changes as an unfair entrenchment of “the monopoly enjoyed by” Tabcorp.

“It will lead to serious impacts on the Queensland racing sector and jobs, while disproportionably affecting punters who choose online options,” the group said.

Analysts at Barrenjoey Capital Partners said the Queensland decision was likely to have implications for other states – especially Victoria and Western Australia, which are going through licence renewal processes.

“The move by Queensland to neutralise taxes across all bookmakers will be studied by other states and racing industries and we think the POCT will drift into the high-teens over the medium term,” wrote analysts Matt Ryan and Annie Zhu.

“We see an outcome where the next retail licence could drive less industry funding, but this could be subsidised by higher industry funding from the POCT.”

Others, including MST Marquee’s Rohan Sundram, said they expected Tabcorp to increase lobbying efforts in Victoria and NSW, which makes up some 55 per cent of Tabcorp’s wagering revenues.

Stephen Ferguson, the chief executive of the Australian Hotels Association, on Wednesday said: “All we’re after is for the bookmakers to pay the same rate of tax.

“Pubs and clubs pay the vast majority of TV broadcast rights to the racing industry, compared to the foreign-owned bookies,” Mr Ferguson said. “Nearly 100 per cent of pubs are Australian owned.

“We want the other states to follow Queensland.”