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Betting providers hit with new Point of Consumption tax in Australia

Betting companies serving customers in South Australia will be liable to a point of consumption tax (POC) from next year under a budget proposal released Thursday.

The state government of South Australia will apply the new POC tax on all state-licensed bookmakers, authorised interstate betting operators and corporate bookmakers, including the likes of William Hill, bet365, Ladbrokes, and state TABs.

The POC tax will be applied from July 1st, 2017, at a rate of 15 per cent of net wagering revenue.

The state government explained that the tax will apply to bets on horse, harness and greyhound racing, and bets on sports such as AFL, cricket and soccer. It will also apply to other bets, such as those on the winner of the federal election or the Academy Awards.

"The betting industry is rapidly changing and our tax regime needs to change with it," said South Australia Treasurer Tom Koutsantonis.

"If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not in whichever jurisdiction their head office and servers happen to be located."

All operators will benefit from a tax-free threshold of AUD$150,000 in annual net wagering revenue, with the government estimating that it will generate tax revenue of $9.2m a year based on 2014-15 wagering data.

Of this amount, $500,000 will be directed towards the Gamblers Rehabilitation Fund, marking the first time that the industry has contributed to the fund.

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