From 1 January 2019, a Point of Consumption Tax (POCT) on wagering and betting has applied in Victoria to ensure wagering and betting companies pay their fair share of Victorian taxes and to better align Victoria’s tax system with the increasingly digital betting environment. The POCT replaced a ‘place of supply’ tax framework that applied only to the Victorian wagering and betting licensee, Tabcorp Wagering (VIC) Pty Ltd (Tabcorp).
The Government implemented a POCT designed to ensure there was no adverse impact on Victoria’s racing industry, which is a major part of Victoria’s sporting landscape and cultural tradition, and to protect Victorian jobs.
This design, a result of extensive consultation with key industry stakeholders, includes a wagering and betting tax rate of 8 per cent of net wagering revenue and annual tax-free threshold of $1 million. Of the total POCT, 18.75 per cent is paid to the Victorian Racing Industry (VRI), being 1.5 per cent of net wagering revenue by Victorian consumers.
This review acquits the Government’s commitment to assess the implementation of the POCT, including its impact on the VRI — a commitment that was made law by including a review mechanism in the Gambling Regulation Act 2003 (the Act). The review, which was prompted by concerns the introduction of the new taxation framework could affect the viability of the wagering and racing industries, considers the tax rate, tax-free threshold, the treatment of free bets and the payment of tax revenue to the Victorian Racing Industry. Under the Act, the review must be tabled in the Victorian Parliament by December 2020.