As new online betting taxes take effect in Australia, industry analysts are saying it could potentially accelerate consolidation in the ultra-competitive online gambling industry.
Since January 1, the new “point-of-consumption” taxes have been imposed in Western Australia, Victoria, New South Wales (NSW) and the Australian Capital Territory (ACT). Industry giants have warned the new taxes will have adverse effects, but campaigners, state governments, as well as the state-licensed Tabcorp (which runs TABs) are arguing these taxes are necessary to ensure a level playing field.
The states decide their own rate, with some imposing higher rates than others. A 15 percent tax on bookmaker revenue will be collected in ACT, Western Australia, South Australia and Queensland. The rate in Victoria is lower at 8 percent while in NSW it is set at 10 percent.
Major Bookmakers “Not Contributing Their Fair Share”
The introduction of the “point-of-consumption” taxes also marks the very first time that levies are imposed based on where the bet is placed. Traditionally, bookmakers pay their taxes according to where they hold their license – for instance those that are licensed in territories that have lower tax will also contribute less in tax despite operating in the whole of Australia.
The largest chunk of Australia’s online betting sector is comprised of foreign-owned gambling firms that are paying lower taxes than locally-licensed operators. This has created a lot of contention with domestic operators who have accused major foreign operators such as Bet365, Sportsbet, Ladbrokes and BetEasy of not paying their fair share of gaming taxes.
State-Licensed Tabcorp Steps Up Marketing Efforts
Tabcorp in particular has supported the move, in cooperation with state governments and the racing industry. The company said the new taxes will help make sure online bookmakers operate in a well-regulated wagering sector.
In 2018, Tabcorp started to boost its advertising campaign in a bid to attract new customers. The company has, for many years, lagged behind other online bookmakers in terms of marketing and promotions.
Adam Rytenskild, Tabcorp’s head of wagering, said it’s the right time to ramp up their marketing efforts as the new “point-of-consumption” levies will most probably have a significant impact on their rival’s offerings and advertising budget.
New Taxes Will Have Significant Negative Consequences
Australia has become a hotspot for online gambling over the years, with some of the world’s biggest online gambling powerhouses establishing operations in the country. Gambling giants such as Paddy Power Betfair, Ladbrokes, Bet365 as well as The Stars Group, have placed Australia on the global online betting map and turned it into one of the most competitive online wagering markets in the world.
However in recent months, state governments have been imposing new taxes and introducing major changes to gaming regulations. This has sparked disappointment among online bookmakers who argue that they have already been contributing large sums in the form of income tax and GST.
While bookies appreciate the consultation efforts done by governments in outlining the new taxes, the decisions will have large-scale effects according to Labor senator Stephen Conroy, who leads the industry group Responsible Wagering Australia.
More Consolidation On The Way
It will not take long before we see more consolidation happening in Australia’s online gambling industry. Gaming analysts predict that these new taxes will only be bearable for large and well-established firms forcing smaller players to leave the market or merge.
Plans for new gambling regulations were announced earlier in 2018 prompting UK’s largest bookmaker William Hill to sell its Australian assets to BetEasy in a massive $300 million deal. Another factor that was looked at by William Hill in making this decision was the potential threat to its profitability brought about by these new tax laws.
GVC Holdings, Ladbrokes’ parent company snapped up Neds.com.au for $95 million in Nov 2018. Neds was a new player in the Australian online betting scene before it was acquired by GVC.
Sports betting revenue has enjoyed a yearly increase of 15 percent in Australia, making it the fastest-growing gambling stream in the country. This was mostly due to the rapidly-growing popularity of web-based and mobile wagering.
It remains to be seen how the new taxes will affect the industry as a whole, but the likely result in the online gambling operators will take a big hit in the overall gaming revenues. This will likely result in major changes to the Australian online betting landscape as state-licensed firms begin to improve their footing in the competitive market.

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For nearly two decades, we’ve provided the best in class for poker site reviews, top online poker bonuses, strategy tips, poker news, and exclusive free poker content.  Consisting of a team of poker and gambling experts, we deliver the best online poker brand experience for players of all levels, from the fish to the sharks.
For nearly two decades, we’ve provided the best in class for poker site reviews, top online poker bonuses, strategy tips, poker news, and exclusive free poker content.  Consisting of a team of poker and gambling experts, we deliver the best online poker brand experience for players of all levels, from the fish to the sharks.