Last month’s State Budget contained a new “place of consumption” tax of 15 per cent, to be levied from July 1 next year on the “net wagering revenue” of betting companies offering services in South Australia, which means any bets placed locally with Australian-based betting companies will be subject to the impost.
It prompted an irate response from betting agencies, including Sportsbet, who declared it a “shortsighted money grab” demonstrating a lack of understanding of the internet.
But the company today went further, pulling funding for the proposed data hub and terminating its ongoing sponsorship of the Gawler Racecourse.
Sportsbet CFO Ben Sleep said in a statement the data facility would have supported other such facilities in Darwin and Melbourne, and delivered millions of dollars of ongoing investment each year through maintenance, servicing and enhancements.
That investment would now be redirected to the Northern Territory, he said.
“The South Australian Government’s decision to introduce its Punters Tax without industry consultation has created significant uncertainty, with South Australia now considered a high-risk investment destination for any Australian-based bookmaker,” Sleep said.
“Sportsbet cannot invest tens of millions of dollars into a state where its Government has shown that it is willing to significantly move the goal posts without consultation with those most affected.”
But SA’s Council of Social Service declared Sportsbet’s conduct “outrageous and unsporting”, urging the Government to push on with the planned tax.
SACOSS argued that Sportsbet made a net revenue of $470 million last year – a 41 per cent increase on the previous year and a profit increase of 54 per cent.
“But because Sportsbet is registered in the Northern Territory, which caps wagering tax at $550,000 per annum, this huge growth in revenue would see no increase in the gambling tax paid,” the welfare agency said.
“At the same time the current advertising campaign to oppose this legislation must be costing millions of dollars.”
SACOSS acting CEO Greg Ogle said Sportsbet was “a hugely profitable operation, and their reaction to this proposal to close their use of a virtual tax haven is outrageous and unsporting”.
“It is an absolute dummy spit,” he said.
“The proposed wagering tax is an important way to ensure that profits from South Australian betting are taxed in SA, and can be directed to services for South Australians – including support for the problem gamblers that live here and not in virtual tax havens where corporate bookies may choose to nominally reside.”
Sleep said Sportsbet had “regrettably decided to end its ongoing sponsorship of the Gawler Racecourse… with the business instead looking to move its support to Victoria”.
“It makes no business sense for Sportsbet to extend its relationship with Gawler due to the uncertainty created by the South Australian Government,” he said.
“If the Government was to turn around tomorrow and ban bookmakers from advertising or sponsoring events in the state, much like its decision to introduce the unfair Punters Tax, Sportsbet could be liable to pay for advertisements and sponsorships we can’t use.
“We are really disappointed to end our association with Gawler, and while we remain committed to supporting regional racing across Australia, sadly it won’t be in SA.”
Sleep said thousands of customers had “voiced concern” about the proposed tax through petitions and online feedback.
But the State Government offered little sympathy for the online bookmaker, with acting Treasurer John Rau saying: “This company reaped a record $117 million from Australian punters last year, including many in South Australia.”
He said Sportsbet had previously floated the concept of a “cloud-based server” based in SA “as a backup for their NT operations, as the company was concerned that internet access in the NT was vulnerable”.
“It is strange that they propose to consolidate in what they have described as a risky jurisdiction,” he said.
“This Government believes that if betting companies are making profits from South Australian punters they should be paying tax in South Australia, like other South Australian companies do – not in whichever jurisdiction their head office and servers happen to be located.”
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