Victoria’s POCT racing, betting and gambling tax to double from July 1 2024
The Victorian greyhound racing industry is set for a shake-up with the Andrews Labour Government announcing plans to increase the point of consumption tax paid by betting companies.
This move aims to bring Victoria's wagering taxes in line with other states and provide a framework for the industry's long-term sustainability.
The Point of Consumption Tax (POCT) is set to increase from 10% to 15% of net wagering revenue, as per the legislation introduced to Parliament yesterday.
This change will come into effect from July 1 2024 and will align the state's rates with those already in place for wagering and betting activity in New South Wales, Western Australia, South Australia, and Tasmania.
It has been reported that the lion's share of the hike will be transferred to the racing industry, although the racing industry will receive just half of the 15% POCT.
The Hospitals and Charities Fund will continue to receive the other 7.5% balance from the POCT distribution.
In January 2019, a new Point of Consumption Tax (POCT) was implemented in Victoria, replacing the previous “place of supply” tax.
The introduction of POCT in Victoria has been aimed at ensuring that betting and wagering companies contribute their fair share of taxes to the state, irrespective of their headquarters' location.
This move is in line with the changing digital betting landscape and aims to bring greater alignment to Victoria's tax system.
Unfortunately all the POCT has achieved in practice is to increase racing market percentages from 115% to 130%, which has resulted in lower returns and less value for punters.
The Victorian Government has also announced the removal of the “no less favourable” requirement for wagering and betting licence holders.
This requirement previously obligated licence holders to establish agreements with the racing industry that were no less favourable than those in place under the previous licence.
The amendment has become necessary to allow for the issuance of a new licence when the current licence expires in August 2024, due to shifts in the betting market resulting from changes in gambling habits.
As the State Wagering and Betting Licence (Tabcorp) is set to expire in August 2024, industry and government have come together to propose a new funding framework that includes wagering and betting taxes.
According the Victorian Government, this framework aims to provide long-term certainty for the industry and ensure its sustainability.
The Victorian racing industry plays a crucial role in the state's economy, generating $4.7 billion in economic activity every year and supporting over 35,000 full-time equivalent jobs.
Regional Victoria has a strong affinity for racing, with over 100 clubs and 70,000 participants supporting the industry.
This sector contributes a significant economic value of $2.45 billion annually to the region.
The racing industry is an important part of our state's economy and cultural fabric,” said Minister for Racing Anthony Carbines. “We are committed to supporting the industry and ensuring its ongoing success.
The industry will receive long-term certainty with these changes, which will ensure that it continues to be funded from wagering generated on its product.
This will help the industry support jobs and events that bring in millions of dollars each year to communities across the state.
The recent hike in the point of consumption tax (POCT) has been deemed by the Victorian Government as a well-balanced move that aligns Victoria with other states and ensures a stable future for the thriving racing industry in the region.
We're not sure punters will agree.