Clubs escape paying more as government shelves pokie tax gamble
The Minns government has dumped plans to hike poker machine taxes for local clubs in order to pay for the rollout of cashless gaming machines.
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The Minns government has dumped plans to hike poker machine taxes for local clubs in the coming budget.
Treasury bean counters had been mulling over a plan to potentially increase taxes on the money clubs make from pokies in order to pay for the rollout of cashless gaming machines.
Club sources who had been bracing for a hike to be announced in the coming budget believed tax rates could be increased to the higher rate paid by pubs. However, the plan has now been shelved.
Government and industry sources confirmed there will be no tax hike in the budget.
Clubs, which have “not-for-profit” status, currently pay a lower rate on poker machine revenue than pubs.
Taxes on profits from the pokies are calculated every quarter; clubs that make between $1.25 million and $2.5m in profit in a quarter are currently taxed at a rate of 22.5 per cent. Under the ClubGrants scheme, some poker machine profit made by local clubs goes into community grants.
On the current tax rates, Treasury expects to receive $1 billion in 2024-25 from taxes on poker machines at clubs.
The expected revenue is projected to slowly increase to $1.14bn in 2027-28.
That compares to $1.47bn to be raised from pokies in hotels this financial year, growing to $1.78bn in 2027-28.
The mooted plan to increase taxes on pokies’ profit for clubs was being driven by Treasurer Daniel Mookhey. It is understood that Gaming and Racing Minister David Harris was left out of the negotiations.
Sources within the clubs industry had previously warned that any tax hike would limit their capacity to contribute to community causes, including sporting teams, services, and infrastructure. Speculation about the potential tax hike was first reported by The Saturday Telegraph in April.
In a statement, a government spokesman said the government was still “examining” how to implement cashless gaming reforms, which came with “complexities and costs”.
“The government is committed to evidence-based gambling reform,” he said.
“We need to get the balance right between implementing effective harm minimisation measures, and the complexities and costs to industry and jobs associated with implementing a mandatory card-based system. A series of options are being developed.”
Cashless gaming was recommended by a trial that was plagued with problems.
The trial, which involved just 14 “genuine and active” users, did not assess how moving to cashless poker machines would impact pubs and clubs economically, despite being a key term of reference.
Opposition gaming spokesman Kevin Anderson welcomed the backdown.
“Hurting clubs means hurting communities and I’m glad to see the Minns Labor government has come to its senses and listened to feedback about what this decision would have meant,” he said. “Clubs are the beating heart of our rural cities and towns, helping people stay connected and supporting them through tough times.”
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