Corporate bookmakers face tougher time in Northern Territory

Corporate bookmakers could be hit with an increased wagering tax in the Northern Territory to boost government revenues.

Corporate bookmakers could be hit with an increased wagering tax in the Northern Territory to boost government revenues annually by $100 million.

Deutsche Bank analyst Mark Wilson said given the NT had announced it is reviewing its regulatory framework for wagering, he believed it could consider an increased tax rate on the sector.

“As part of this review, we would expect the government to consider upfront licensing fees as well as increasing the wagering tax rate, which is currently capped at $575,000,” he said.

“This currently generates just $6.9 million in wagering tax revenue. We estimate that should the government increase the wagering tax rate to 10 per cent of net revenue as specified in the Racing and Betting Act, this could realise additional wagering tax revenue of around $100m per annum on our estimates.”

The Northern Territory Racing Commission’s chairman, John McBride, last week wrote to all the sports bookmakers lic­ensed through the territory to break the news that in-play betting would be banned.

The large corporate book­makers licensed in the Northern Territory, including Sportsbet, William Hill, Ladbrokes and Bet 365, all offer a live in-play betting ­service.

Mr McBride also announced that he had been asked to conduct a review of the NT’s regulatory framework to recommend ways it could be improved.

“The review will also need to consider options to optimise additional economic and fiscal benefits to the Northern Territory through the licensing process,” he said.

Mr Wilson said the move by the NT was consistent with the bank’s view that the regulatory environment appeared to be returning in favour of the traditional wagering operators.

“These initiatives would further level the playing field between the corporate bookmakers and the traditional wagering operators, thereby enhancing the market positions of Tabcorp and Tatts,” he said.

Mr Wilson said the investment bank also expected the government to consider the implications of such a tax increase, including but not limited to, the possible relocation of the corporate bookmakers to other states or territories, the consequent reduction in employment, and the possible loss of GST revenue.