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Koutsantonis to brief state ministers on gambling tax

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Treasurer Tom Koutsantonis will today pitch his planned gambling tax to an audience of state and federal ministers, urging them to adopt the contentious revenue measure.

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Koutsantonis’s July budget contained provisions for a “place of consumption” tax of 15 per cent to be levied from July 1 next year, hitting the “Net Wagering Revenue” of betting companies offering services in South Australia.

It sparked outrage from some major players in the gaming sector, with online betting giant Sportsbet scrapping local plans for a $20 million high-tech data facility in protest and pulling sponsor support for grassroots sporting clubs.

But the condemnation wasn’t universal, with competitor Ubet preferring a more diplomatic tack, rebuffing Sportsbet and stepping in to fill their sponsorship shortfall.

Federal Minister for Human Services Alan Tudge is chairing a meeting of state gambling ministers in Melbourne this afternoon, convened to ponder responses to illegal offshore wagering being offered in Australia, among other reforms.

Koutsantonis, a former gambling minister, has been invited to “impress upon the meeting the importance to capturing revenue from the super profits of companies in the jurisdiction in which they are doing harm”.

The Treasurer told InDaily in a statement that while venue staff were trained to look out for “dangerous gambling behaviour… there is nothing stopping punters from sitting at a bar and betting their savings away on their phone”.

“While the harm of online gambling is done in SA, the profits on those bets are taxed in whichever jurisdiction the betting company is based, whether that in the Northern Territory, or some other place,” he said.

“[And] our health workers and community service organisations are left to clean up the mess, while online betting providers protect their super profits in tax havens.

“Gambling has evolved and the way in which we legislate and tax betting companies has to evolve with it… this is a common-sense reform that I think should be embraced across Australia to help Australian governments manage the harm that is done through gambling.”

SA Council of Social Service chief Ross Womersley agreed, telling InDaily: “Frankly I think it’s absolutely essential, and other jurisdictions would be foolish to not move pretty quickly to follow South Australia’s example.”

The budget measure was prompted by a SACOSS report calling for broader reform, including a national place of consumption tax on betting companies.

But Womersley warned there may be “some desire to wait and see” how the tax progressed in SA, pointing out “one of the things the other jurisdictions may worry about is whether or not the big betting agencies challenge this in courts – which is entirely likely”.

“It’s been their habit to treat these matters as largely legal disputes and throw considerable sums of money at them, given it’s their profits that are likely to be impacted on,” he said.

He also argued the measure should be standardised through Commonwealth reforms, saying “this is probably not the most ideal arrangement where individual states go off and make the provisions themselves”.

“It would be far preferable for the Federal Government to have taken the initiative and led this policy,” he said.

“But in the absence of federal action, the states have to act.”

SA will be the first Australian jurisdiction to introduce the wagering tax based on the place of consumption, which will apply to bets on horse, harness and greyhound racing, as well as sports such as AFL, cricket and soccer. It will also apply to other bets, including the winners of federal elections or Academy Awards.

The state measure proposes a tax-free threshold of $150,000 Net Wagering Revenue per year for all betting companies.

It is expected to return around $9 million a year to state coffers.

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