Queensland tax on bonuses have bookies on edge

Queensland and local sports betting operators are at daggers drawn over new changes in the way bonus offerings are taxed in the state, ABC News reports exclusively. Essentially, the state government has introduced changes to the way promotions are taxed in the jurisdiction. Previously, bonuses would not be considered taxable revenue for gambling entities in the state, but this has now changed, meaning companies may feel inclined to reduce these offers altogether.

What’s changing now is that the state used to only tax gambling companies’ revenues, that is the amount of money they received minus the amount of money they paid out. However, moving forward, bonuses will also count as taxable income.

This means that if a customer deposits $100 and they receive $100 as a "freebie," the additional amount that is given to a player will now constitute taxable revenue, which can throw a spanner in the works of companies’ marketing machines as confirmed by University of Queensland director of digital cultures Nicholas Carah said cited by the media outlet.

"These kinds of offers are a really crucial part of the marketing machinery of betting companies," Carah explained. Consumers are incentivized to opt into bonuses because they can gain access to additional funds and bet more and longer, but this will most likely change as companies would be loath to introduce such offers if they know that they must pay tax on the money they extend to customers, even when that money "does not really exist."

Tangible or not, the tax on it is now very real and can impact corporate bottom lines. The government hopes that this additional taxation will help with backing the state’s racing industry, but the industry has responded something belligerently to the pitch. The taxed revenue allocated to the racing industry by the laws has increased to 80% from previously 35%, and the new laws also raise the tax on sportsbooks to 20% from previously 15%.

Gambling companies have said that they may be forced to reduce their odds offering and even remove Queensland races from their front screens. This would not help the industry in any way, but Treasurer Cameron Dick is confident that the tax makes sense as it would levy online betting companies at the appropriate rate. The move was necessitated by the growth in online wagering, Dick added.

Against him stands Responsible Wagering Australia, a trade body that represents the interests of several private companies in the sector, to wit Betfair, Entain, Sportsbet, Unibet, PointsBet, and Bet365, which warned that the odds may suffer because of this decision, giving local punters less of an incentive to bet on Queensland races.

Queensland also recently pitched amendments to its casino laws to make the industry safer in the wake of the investigations into Star Entertainment Group and Crown Resorts.

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