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New Gambling Tax Laws in South Australia

A$50 million in tax reveues could accrue to South Australia.
The Australian provincial government of South Australia could benefit handsomely - by as much as A$50 million - from a new federal law allowing state governments to collect taxes from online gambling companies based on the principle of point-of-consumption; in other words, the location of the gambler, not the registered office of the company.
The Australian newspaper reported over the weekend that around 74,000 South Australians have an online gambling account through 19 interstate betting operations, but none of the gambling companies pay any tax in SA.
The article refers to Australian-licensed mainly sportsbook operators and not the largely unknown quantity of the illegal, unlicensed offshore operators.
SA treasurer Tom Koutsantonis revealed that South Australia attended a meeting of state treasurers earlier this month where it was agreed that SA would work on a proposal to implement the new tax arrangement.
“It is important that online gambling operators pay taxes considering that they are generating profits based on the betting activity of South Australians,” he said.
One estimate based on an independent "top four" accounting firm report submitted to the provincial government tax authorities, suggested that the new tax could be worth A$4.7 billion nationally over a ten year period, giving South Australia around A$4.7 billion annually.
The submission states: “So in this state, a tax for online gambling set at 40 percent to match that of existing ‘for profit’ gambling businesses would generate many millions for South Australia’’.
Under current rules, gambling companies pay a A$1500 fee to allow them to operate and advertise in SA, but no taxes. The state collects $390 million in tax from gambling companies that are registered in the province.
Koutsantonis says that the new regime would depend on financial self-reportage from gambling firms on how much of their business was conducted within the province, backed by government audit and compliance networks, and he would be suggesting this sort of structure to the other Australian provinces.

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