Major Australian Betting Agency Opposes Turnover Tax Cut

by Mary Swire, Tax-News.com, Hong Kong

07 December 2001

The Australian betting agency TAB Limited (Totalizator Agency Board), based in the State of New South Wales, has declared that it does not support the demands from bookmakers operating in the State, who are calling for a cut in the turnover tax and a reduction of the minimum phone bet. Instead TAB's managing director Warren Wilson has called for a wider debate on the financial operations of Australia's betting industry.

In a statement released this week from TAB, Mr Wilson said: 'There is a strong argument for a serious look at the funding structure of racing in this state as well as who pays what to government in terms of betting taxes.'

NSW bookmakers have raised their concerns over a ruling restricting telephone bets to a minimum of A$200 and claim they are forced to hand over a two per cent tax on turnover which is double that of their interstate counterparts.

According to The Age online news service, Sydney's biggest bookmaker Michael Sullivan announced last week that he would consider taking his business out of NSW if the government does not review the situation. 'Right now all they are doing is creating a monopoly for the TAB,' he said.

'TAB Limited is big, but it is not bad,' responded Wilson. 'We are paying more than our fair share. We pay four times more tax than the bookies. In championing the debate on the issue of bookmakers' operations and industry funding, it is vital that all participants be informed of these current contribution levels and tax-rate differentials.'

Wilson cited an example of TAB operations on a typical Saturday race day of 24 November when TAB fielded total sales of $29.66 million on 148 races around the country on that day. The pay out to punters amounted to $24.99 million and of the remainder the government took $1.39 million with the racing industry claiming $1.28 million.

'If you put that type of betting through bookmakers hands the government and racing industry shares reduce to less than $250,000 each. Over the course of a full year, that revenue difference translates to a loss of over $140 million to the NSW racing industry and even more to the government,' claimed Wilson. He added that this scenario would be 'catastrophic' for the industry.

Wilson continued: 'We paid $303 million to the government for our licence for exclusive off-course betting. There is a place for bookmakers, and that is on course. The fact is that TAB provides around 75 per cent of the total funding for the running of racing in NSW ... If the TAB doesn't exist then the industry is gone. Racing cannot afford for the TAB to be unhealthy.'

He declared that the TAB would suffer if the $200 minimum phone bet is reduced as he said: 'We are very highly regulated; we believe in regulation and integrity is absolutely paramount. Maybe the bookies don't want to be regulated.'

The managing director also called for a move to curb off-shore gambling which is thriving in places such as Vanuatu despite being illegal in NSW. 'The industry should appeal to the federal government and bookies should join in the attack,' said Wilson. 'Operations such as Vanuatu and interstate are impacting on both the TAB and the bookmakers. Last year around $500 million was bet in Vanuatu with no accountability.'

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