Chapter 5 2013/14 Heading
A Database On Australia s Gambling Industry Published and Prepared by the Australasian Gaming Council (AGC). DISCLAIMER Whilst a great deal of care has been taken in the preparation of this publication, it is nevertheless necessary to caution users with regard to its accuracy. Address: Phone Email Web Level 1/1 Little Collins Street Melbourne 3000 Victoria Australia +61 3 9650 1856 info@austgamingcouncil.org.au www.austgamingcouncil.org.au The information contained in this publication has been obtained from external sources and has not been independently verified by the Australasian Gaming Council ( the Council ). The Council expressly disclaims all and any liability (including all liability from or attributable to any neglect or wrongful act or omission) to any persons in respect of anything done or omitted to be done by any person in reliance whether in whole or in part upon any material in this publication. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1986 The Australasian Gaming Council welcomes comments and suggestions on this publication. Please contact info@austgamingcouncil.org.au
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Chapter 5 Gambling Taxation in Australia OVERVIEW... 2 EFFECTIVE TAXATION... 3 AGGREGATE TAXATION... 5 PER CAPITA TAXATION... 6 GAMBLING TAXATION RATES... 7 BOOKMAKERS... 7 CASINOS... 9 GAMING MACHINES - CLUBS... 12 GAMING MACHINES - HOTELS... 16 KENO... 18 LOTTERIES... 19 ON-COURSE AND OFF-COURSE TOTALISATOR... 21 OTHER GAMBLING TAXES... 22 NON GAMBLING TAXATION CONTRIBUTIONS... 24 CASINOS... 24 CLUBS... 24 HOTELS... 25 1
Chapter 5 Gambling Taxation in Australia OVERVIEW Revenue from gambling in Australia is derived primarily from state and territory direct taxes, licence fees and mandatory contributions. The industry is subject to relatively high taxes with a percentage returned to the community to provide information programs, problem gambling prevention programs and assistance to those experiencing gambling-related problems. Table 5-1 Overview of gambling taxation revenue in Australia by state/territory (2011-12) Location Gambling tax ($m) Gambling tax per adult ($) Australian Capital Territory 53 183 New South Wales 1782 317 Northern Territory 53 311 Queensland 1004 292 South Australia 418 323 Tasmania 83 211 Victoria 1710 393 Western Australia 402 218 Source: Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition). Total gambling revenue is incomplete due to some unavailable revenue figures that are used to derive this number. Refer to Appendix for explanatory notes. In 2011-12, gambling taxes in Australia amounted to $5.5 billion. On a per capita basis, gambling tax per adult was highest in Victoria, followed by South Australia. Gambling taxation per capita and overall was lowest in the ACT. Table 5-2 Gambling tax as a proportion of total state tax revenue in Australia Location 2008-09 2009-10 2010-11 2011-12 Australian Capital Territory 5.0 4.7 4.3 4.5 New South Wales 9.2 8.9 8.6 8.8 Northern Territory 18.0 14.7 12.6 13.2 Queensland 10.4 9.9 9.5 9.4 South Australia 11.5 11.0 10.5 10.7 Tasmania 11.7 11.3 11.0 10.6 Victoria 13.1 11.9 11.1 11.5 Western Australia 3.3 2.8 2.9 3.0 Source: Extrapolated from ABS 5506.0 Taxation Revenue, Australia 2011-12 Gambling taxes in the 2011-12 financial year accounted for a significant proportion of total state and territory taxes, particularly in the Northern Territory (13.2%), Victoria (11.5%), South Australia (10.7%) and Tasmania (10.6%). In Western Australia and the ACT gambling revenue accounted for a smaller proportion of total revenue. The restriction in Western Australia prohibiting gaming machines at clubs and hotels explains, to a large extent, this relatively low proportion. 2
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Figure 5-1 Gambling tax as a proportion of total tax revenue in Australia by state/territory (2008-09 to 2011-12) Source: Extrapolated from ABS 5506.0 Taxation Revenue, Australia 2011-12 EFFECTIVE TAXATION Table 5-3 Gambling expenditure as a percentage of gambling tax revenue in Australia by gambling form (2011-12) Product Expenditure ($m) Tax ($m) % Gaming 17,291.9 5,131.2 30.2 Casino gaming 4,081.1 580.1 14.2 Gaming machines 1 10,911.2 3,195.4 29.3 Keno 307.0 n/a 2 n/a Lotteries and pools 3 1,968.3 1,355.0 68.8 Minor gaming 4 24.3 0.7 2.9 Racing 2,818.7 343.9 12.2 Sports betting 396.7 30.9 7.8 All Gambling 20,507.3 5,505.9 26.8 Source: Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition). Total gambling revenue is incomplete due to Minor Gaming data being unavailable for most states. Refer to Appendix for explanatory notes. The level of taxation between types of gambling and jurisdictions varies. Of all gambling expenditure reported in the 2011-12 year, 26.8% was collected as tax by governments. Lotteries and pools were generally taxed at the highest level (68.8%), followed by gaming machines (29.3%), racing (12.2%) and casino gaming (14.2%). 1 Includes keno in New South Wales, Victoria, Queensland and Tasmania 2 Revenue from Keno included as part of revenue from Lotteries and Pools, or Gaming Machines as specified. 3 Includes keno in South Australia and the ACT 4 Total gambling revenue is incomplete due to Minor Gaming data being unavailable for most states. No tax is received from minor gaming activities, only income is from application fees. 3
Chapter 5 Gambling Taxation in Australia Figure 5-2 Gambling tax revenue as a percentage of gambling expenditure in Australia by state/territory (2011-12) Source: Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition). Total gambling revenue is incomplete due to Minor Gaming data being unavailable for most states. Refer to Appendix for explanatory notes. In 2011-12, gambling taxation as a proportion of expenditure was relatively high in South Australia (35.94%), Victoria (31.31%) and the Western Australia (30.58%) compared to the national average of 26.85%. In contrast, the ACT (21.57%), Tasmania (21.72%) and NSW (22.94%) tax revenue figures were below the national average, while the Northern Territory, with tax revenue of only 7.67%, was significantly less than the national figure. 4
A Database on Australia s Gambling Industry 2013/14 AGGREGATE TAXATION Table 5-4 Aggregate gambling taxation in Australia by gambling type and state/territory (2011-12) - $ million ACT NSW NT QLD SA TAS VIC WA AUST $ million GAMING Casino gaming 2.0 133.4 11.1 85.1 23.3 23.5 195.3 106.4 580.1 Gaming machines 35.7 1165.6 16.9 642.2 290.9 30.4 1013.6-3195.4 Interactive gaming - - - U - - - - 0.0 Lotteries and pools 14.2 332.1 15.8 235.7 102.7 27.3 370.4 257.0 1355.1 Minor gaming - - - U - - U 0.7 0.7 Total 52.0 1631.1 43.7 963.0 416.9 81.2 1579.3 364.0 5131.2 RACING Bookmakers - - 2.4 U - 1.8 U - 4.2 On-course totalisator 5 - - 1.0 - - - 13.5-14.5 TAB 1.3 139.0 6.1 38.8 0.8-103.5 35.7 325.2 Total 1.3 139.0 9.4 38.8 0.8 1.8 116.9 35.7 343.9 SPORTS BETTING Bookmaker and other Fixed Odds - - - - - 0.4 U 0.0 0.4 Bookmaker and other Pool Betting U - - - - - - - 0.0 TAB Fixed Odds - 10.9-2.2 0.5 U 13.8 1.8 29.1 TAB TOTE Odds - 0.8-0.1 - U 0.4 0.1 1.3 Total 0.0 11.7 0.0 2.2 0.5 0.4 14.2 1.9 30.9 ALL GAMBLING 53.3 1781.7 53.1 1004.0 418.2 83.4 1710.4 401.7 5505.9 Source: Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition). Total gambling revenue is incomplete due to Interactive and Minor Gaming data being unavailable for most states. Please note that some columns may not add due to rounding. Refer to Appendix for explanatory notes. U denotes unavailable data 5 Data for ACT, NSW and Queensland is combined with Government revenue from TAB 5
Chapter 5 Gambling Taxation in Australia PER CAPITA TAXATION Table 5-5 Per capita gambling taxation in Australia by gambling type and state/territory (2011-12) ($) ACT NSW NT QLD SA TAS VIC WA AUST $ GAMING Casino gaming 6.96 23.76 65.01 24.72 18.02 59.49 44.86 57.78 33.34 Gaming machines 122.98 207.68 98.85 186.66 224.90 76.79 232.83-178.53 6 Interactive gaming - - - U - - - - - Lotteries and pools 48.93 59.18 92.32 68.50 79.37 68.88 85.07 139.59 75.71 6 Minor gaming - - - U - - U 0.38 0.04 Total 178.88 290.62 256.17 279.89 322.29 205.16 362.76 197.75 294.88 RACING Bookmakers - - 13.89 U - 4.61 U - 0.24 On-course totalisator 7 - - 5.75 - - - 3.10-0.83 TAB 4.64 24.77 35.45 11.28 0.60-23.77 19.42 18.69 Total 4.64 24.77 55.09 11.28 0.60 4.61 26.86 19.42 19.76 SPORTS BETTING Bookmaker and other Fixed Odds - - - - - 1.00 U 0.00 0.02 Bookmaker and other Pool Betting U - - - - - - - 0.00 TAB Fixed Odds - 1.94-0.63 0.41 U 3.16 0.97 1.67 TAB TOTE Odds - 0.13-0.02 - U 0.10 0.05 0.08 Total 0.00 2.08 0.00 0.65 0.41 1.00 3.26 1.02 1.77 ALL GAMBLING 183.52 317.47 311.26 291.82 323.30 210.77 392.88 218.19 316.42 Source: Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition). Total gambling revenue is incomplete due to Interactive and Minor Gaming data being unavailable for most states. Please note that some columns may not add due to rounding. Refer to Appendix for explanatory notes. U denotes unavailable data. 6 Extrapolated from Government Statistician, Queensland Treasury and Trade (2014) Australian Gambling Statistics 2011-12 (29 th edition and ABS 3101.0 Australian Demographic Statistics, June Quarter 2013 7 Data from the ACT, NSW and Queensland is combined with Government revenue from TAB 6
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Victoria ($393 per adult) and South Australia ($323 per adult) were the most highly taxed states (on a per capita basis) in Australia, all exceeding the national average of $316. The Northern Territory averaged out at $317 per capita. The national taxation rate per capita for racing in 2011-12 was $20. This was exceeded in the Northern Territory ($55 per capita), Victoria ($27 per capita) and New South Wales ($25 per capita). In 2011-12 per capita gaming tax in Australia was $295, with Victoria and South Australia subject to the highest amounts ($363 and $322 per capita respectively). Sports betting per capita taxation averaged $1.77 across Australia in 2011-12. GAMBLING TAXATION RATES The information for this section on gambling taxation rates has been sourced from the following: Government of Western Australia, Department of Treasury (2014), Overview of state taxes and royalties 2013-14. New South Wales Treasury (2013) Interstate comparison of taxes 2013-14: Research & information paper, trp 13-02. Bookmakers Australian Capital Territory Racing Sports betting Abolished Totalisator: 6% of player loss. Fixed odds: Dependent on event. 0.50% of bookmaker turnover on fixed odds betting on events where the number of possible outcomes is four or less when turnover less than $15 million 0.17% of bookmaker turnover on fixed odds betting on events where the number of possible outcomes is four or less when turnover greater than $15 million. 1% of bookmaker turnover on all fixed odds betting on events when turnover less than $40 million, reduced to 0.60% for turnover greater than $40 million 6.75% of bookmaker turnover on spread betting transactions 6% of bookmaker turnover on parimutuel sports betting transactions 0.25% of bookmaker turnover on sports betting transactions on selected international events GST credit provided. 7
Chapter 5 Gambling Taxation in Australia New South Wales Racing Sports betting Abolished Totalisator: 19.11% of player loss Fixed odds: 10.91% player loss Northern Territory Racing Sports betting Registered on-course bookmakers pay 0.33% of turnover Corporate bookmarkers pay 10% of gross profit from July 2013 a maximum of $267,500 per annum is payable. Totalisator: Dependent on event. Fixed odds: Dependent on event. Tax rates are 40% of the licensee s commission on thoroughbred, harness and greyhound races. 20% of the licensee s commission for other races, events, sports and activities held in Australia. 10% of the licensee s commission applies to international races and sporting events. 8 Bookmakers Betting Levy (Sports): 10% gross profit applies to internationally sourced bets with a maximum of $267,500 per annum payable. Nil for domestically sourced bets. 28 Queensland Racing Abolished Sports betting Totalisator: 20% of commission plus quarterly licence fee of $206,000 Fixed odds: 20% of commission South Australia Racing Sports betting Abolished Totalisator: 6% of player loss Fixed odds: 6% of player loss Bookmakers Betting Levy (Sports): Bets made by persons outside Australia: 0.25% of turnover Tasmania Racing Sports betting Abolished Abolished A fixed annual Totalisator Wagering Levy is paid by the licence holder. The levy s indexed annually and for 2013-14 it is $6.862 million. 9 8 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 9 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 8
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Victoria Racing Sports betting Abolished Simulated racing (Trackside): 10.91% of player loss Totalisator: 7.6% of player loss Fixed odds: 4.38% of player loss Western Australia Racing Sports betting Abolished Totalisator: 5% of turnover. Fixed odds: 0.5% of turnover. Bookmakers Betting Levy (Sports): 0.5% of turnover at a racecourse, and 1.5% of turnover at a sporting event. 10 Casinos Australian Capital Territory Tax Licence 10.90% of general gaming operations gross revenue and 0.90% of Commission-based operations gross revenue. $865,900 per annum for 2013-14, CPI indexed annually New South Wales Tax Licence A single rate of 16.41% for gross revenue from combined table gaming and electronic gaming machines applies, plus a super tax on revenue above $682 million per annum at 1% per $6 million to a maximum of 38.91%. The tax bands are indexed annually. One off payment of $256 million paid in 1995 for exclusive 12 year licence. Exclusivity agreement extended for 12 years from November 2007 for a fee of $100 million. Levy International Junket/ Premium Player Commission Programs A Responsible Gambling Levy of 2% of gross gaming revenue is payable. Agreed tax rate of 10% applies to high-roller gaming revenue, with a minimum amount of $6 million payable annually. It is payable in two installments of $3 million in January and July. 10 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 9
Chapter 5 Gambling Taxation in Australia Northern Territory Tax Lasseters: General casino tax of 8% on table games gross profit plus 21% of gross profit for gaming machines. SKYCITY Darwin: General casino tax of 12% on gross profit for in-house Keno and table games plus 20% of gross profit for gaming machines. Commission-based games incur a tax of 9.09% of gross profit less GST. Internet casino: 4% of gross profit on internationally sourced bets. Licence Nil Queensland Brisbane and Gold Coast casinos: 20% of monthly gross table gaming and keno revenue and 10% of premium junket monthly gross gaming revenue. The tax rate on gaming machines is 30% of monthly gross revenue. Tax Townsville and Cairns casinos: 10% of monthly gross table gaming and keno revenue and 10% of premium junket monthly gross gaming revenue. The tax rate on gaming machines is 20% of monthly gross revenue. Gross gaming revenue is calculated on the amount bet minus the amount won by players. GST credit is provided. Licence $214,452 per quarter South Australia Tax As part of an agreement to increase the number of casino gaming machines and table games available, gaming tax rates for the Adelaide casino increased to 41% and 3.41% respectively, from 1 January 2014. In addition, new taxes are applied to premium gaming machine revenue at a rate of 10.91%, and premium table game revenue at a rate of 0.91%, Automated table games are taxed at 10.91% of revenue. Licence Nil 10
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Tasmania Tax 11 Federal Hotels Ltd has the exclusive right to conduct casino operations and operate gaming machines in Tasmania. Gaming machines tax is calculated on combined gross profit for both casinos and all hotels and clubs. A tiered structure of gaming machine tax applied for the 2012-13 period as follows: 20.88% of first $35 million gross profit on gaming machines and 25.88% on gross revenue in excess of $35 million. From 1 July 2013, a single flat tax rate of 25.88% will apply to all gross profit. Licence Levy 0.88% of annual gross table game profit 5.88% of annual gross keno profit $144,900 per month (2013-14), indexed annually. An additional 4% Community Support Levy is derived from the annual gross profit. Victoria Tax From 1 July 2012: Regular players: 29.85% of gross revenue from gaming machines and 21.25% of gross table games revenue, plus a 1% Community Benefit Levy, plus super tax. Casino tax on gross gaming revenue will continue to increase annually by 1.72% until it reaches 31.57% in 2014-15. The super tax is calculated on gross gaming revenue (gaming machines and table games) above the base amount. The base amount for the 2012-13 period was $878 million. Specifically, super tax is 1% for gross revenue up to $20 million over the base amount, rising in 1% increments for each $20 million bracket to a maximum of 20% on gross gaming revenue over $380 million above the base amount. Commission-based players: 9% of gross revenue applies to high roller tables, plus a 1% Community Benefit Levy, plus super tax. Note: where commission based players play gaming machines the 9% tax rate applies. The super tax is calculated on gross gaming revenue (gaming machines and table games) above the base amount. The base amount for the 2012-13 period was $258 million. Again, super tax is 1% for gross revenue up to $20 million over the base amount, rising in 1% increments for each $20 million bracket to a maximum of 11% on gross gaming revenue over $200 million above the base amount, then 12.25% for all revenue over $220 million above the base amount. Licence $358.4 million (fully paid 1999). Levy An additional one per cent of gross gaming revenue is earmarked for the Community Benefit Levy. 11 Gaming is also offered on Spirit of Tasmania ships (TT-Line - Admirals Casino). Gaming machines are taxed at 17.91% of gross profit and all other forms of gaming at 7.91% of gross profit. 11
Chapter 5 Gambling Taxation in Australia Western Australia Tax Licence Levy Gaming machines 20.956% of gross revenue Fully Automated Gaming Machines 22% of gross revenue Table games (including keno) - 18% of gross revenue International commission business - 11% of gross revenue One-off payment of $20.6 million in 1985 for security of licence. Approximately $2.630 million (2013) per annum, indexed annually to CPI. One-off payment of $20 million in 2010 to allow for an increase in the number of EGMs and table games. 2% of gross Electronic Gaming Machine revenue and 1% of gross gaming revenue from table games, ICB and FATG for upkeep of Burswood Park and Swan/Canning River conservation. Gaming Machines - Clubs Australian Capital Territory Table 5-6 Current tax rate on gaming machines in clubs Australian Capital Territory Gross monthly gaming machine revenue MTR < $15,000 0.0% > $15,000 - < $25,000 15.0% > $25,000 - < $50,000 17.0% > $50,000 21.0% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 An additional Problem Gambling Assistance Fund levy of 0.60% of gross monthly gambling machine revenue is also charged. New South Wales Table 5-7 Current tax rate on gaming machines in clubs New South Wales Gross Annual Revenue 12 $200,000 > $200,000 to $1m > $1m to $5m Rates from 1 Sept (%) > $5m to $10m > $10m >$20m 2011 13 0.0 10.0 19.9 24.4 26.4 28.4 Sources: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02, Office of Liquor, Gaming and Racing NSW (2014), Club gaming tax rates under the ClubGRANTS scheme, and Gaming Machine Tax Act 2001 (2012), Section 15A, Tax rates registered clubs. The ClubGRANTS scheme (formerly known as the Community Development and Support Expenditure Scheme), was established in September 2011 to provide registered clubs with tax rebates of up to 1.85% of their gaming machine profits over $1 million when they spend an equivalent amount on eligible community projects. 12 New South Wales Treasury (2013) Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 13 Tax rates specified do not take into account tax rebates under the CDSE / ClubGRANTS scheme. 12
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council A minimum of 0.4% of a club s gaming machine profits in excess of $1 million is allocated to the ClubGRANTS fund each tax year. These amounts are automatically taken from the tax paid by clubs at the end of each taxation year. 14 GST rebate payments are also paid to registered clubs on the first $200,000 of gaming profits. In New South Wales club venue operators pay tax quarterly. Northern Territory Table 5-8 Current tax rate on gaming machines in clubs Northern Territory Monthly gross profits MTR $0 $10,000 12.91% $10,001 $100,000 22.91% $100,001 $200,000 32.91% >$200,000 42.91% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 Queensland Table 5-9 Current tax rate on gaming machines in clubs Queensland Monthly metered win Up to $9,500 0.0% $9,501 - $75,000 17.91% $75,001 - $150,000 20.91% $150,001 - $300,000 23.91% $300,001 - $850,000 25.91% $850,001 - $1.4 million 30.91% >$1.4 million 35.00% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 Note: These tax rates are post-gst. MTR Tax rates are based on the monthly metered win (i.e. the amount bet less payout to players). In Queensland club venue operators pay tax monthly. The Queensland Office of Liquor and Gaming Regulation distributes revenue from gaming taxes collected to various not-for-profit community groups throughout Queensland via the Gambling Community Benefit Fund (GCBF). 14 Office of Liquor, Gaming and Racing NSW (2014) Club gaming tax rates under the ClubGRANTS scheme 13
Chapter 5 Gambling Taxation in Australia South Australia Table 5-10 Current tax rate on gaming machines in clubs South Australia Annual net gambling revenue (NGR) Tax Rate $0 $75,000 0% $75,001 $399,000 21.00% of excess $399,001 $945,000 $68,040 + 28.50% of excess $945,001 $1,500,000 $223,650 + 30.91% of excess $1,500,001 - $2,500,000 $395,200.50 + 37.50% of excess $2,500,001 $3,500,000 $770,200.50 + 47.00% of excess Above $3.5 million $1,240,200.50 + 55.00% of excess Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 In South Australia, tax rates are based on annual net gambling revenue in a financial year. However, the tax is calculated and paid for on a monthly basis by club venue operators. Tasmania Federal Hotels Ltd has the exclusive right to conduct casino operations and operate gaming machines in Tasmania. Gaming machine tax is calculated on combined annual gross profit for both casinos and all hotels and clubs. The tiered structure of gaming machine tax, as specified in the table below, applied during 2012-13. Table 5-11 Previous tax rate on gaming machines in clubs Tasmania Federal Hotels total gross profit earned in a financial year 15 MTR < $35 million 20.88% $35 million of excess 25.88% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 On and from 1 st July 2013, the tiered approach has been replaced by a flat tax rate of 25.88%. 16 An additional 4% Community Support Levy is derived from the annual gross profit. 15 Gaming machine tax is calculated on combined gross profit for both casinos and all hotels and clubs. 16 Tasmanian Gaming Commission (2013) Annual Report 2012-13 14
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Victoria Table 5-12 Current tax rate on gaming machines in clubs Victoria 17 Average Monthly per machine revenue Club Tax Rate $0 - $2,666 0.0% $2,667 - $12,500 42.5% $12,501 onwards 50.0% Source: Victorian Commission for Gambling and Liquor Regulation (2012) Gambling information sheet: taxation thresholds and marginal tax rates in 2012. As of 2012, taxation rates in Victoria are based on a progressive scale that applies to each venue s average monthly revenue per gaming machine. Gaming revenue is defined as the total amount wagered, less the return to players, which is set at a minimum 87% of gaming machine turnover. Average monthly revenue per gaming machine entitlement is calculated by dividing each venue s total monthly revenue by the number of machines operating within the venue. The total gaming machine tax liability will be determined by multiplying the tax per machine rate by the number of machine entitlements held by the venue operator with respect to the venue for the relevant month. 18 In Victoria club venue operators pay tax monthly. 17 Note: A proposal to amend the taxation arrangements as well as the minimum amount returned to players on electronic gaming machines in gaming venues is under consideration as at March 2014. 18 Victorian Commission for Gambling and Liquor Regulation (2012) Gambling information sheet: taxation thresholds and marginal tax rates in 2012. 15
Gaming Machines - Hotels Australian Capital Territory Chapter 5 Gambling Taxation in Australia Tax on gaming machines in hotels is set at a rate of 25.9% of monthly gross revenue. In addition, a Problem Gambling Assistance Fund levy of 0.60% of gross monthly gaming machine revenue is applied. New South Wales Table 5-13 Current tax rate on gaming machines in hotels New South Wales Annual revenue $0 to $200,000 $200,001 to $1m >$1m to $5m > $5m 2010 0.0% 33.0% 36.0% 50.0% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 Northern Territory Table 5-14 Current tax rate on gaming machines in hotels New South Wales Monthly gross profits Taxation Rate $0 $10,000 12.91% $10,001 - $100,000 22.91% $100,001 - $200,000 32.91% >$200,001-42.91% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 A Community Benefit Levy of 10% of gross profits is also payable. Queensland A tax rate of 35.00% applies to hotel gaming machines, based on monthly metered wins. In addition, hotels with monthly metered wins of more than $100,000 must pay the levy outlined in Table 5-15. The Major Facilities Levy, introduced in 2001 to finance major sporting and cultural developments, has been renamed the Health Services Levy and will accrue revenue for health services. The Health Services Levy, as has been the case with the Major Facilities Levy, will only apply to hotels with monthly metered wins of over $100,000. Table 5-15 Health Services Levy on gaming machines in hotels Queensland Taxable monthly metered win Levy rate $100,001 - $140,000 3.5% $140,001 - $180,000 5.5% $180,001-220,000 7.5% $220,001 - $260,000 13.5% Over $260,000 20.0% Source: New South Wales Treasury (2013) Interstate comparison of taxes 2013-14: Research & information paper, trp 13-02 Note: These tax rates are post-gst. 16
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council South Australia Table 5-16 Current tax rate on gaming machines in hotels South Australia Annual net gaming revenue Taxation Rate $0 $75,000 Nil $75,001 $399,000 27.50% of excess $399,001 $945,000 $89,100 + 37.00% of excess $945,001 $1,500,000 $291,120 + 40.91% of excess $1,500,001 - $2,500,000 $518,170.50 + 47.50% of excess $2,500,001 - $3,500,000 $993,170.50 + 57.00% of excess Above $3.5 million $1,563,170.50 + 65.00% of excess Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 Tasmania Federal Hotels Ltd has the exclusive right to conduct casino operations and operate gaming machines in Tasmania. Gaming machines tax is calculated on combined gross profit for both casinos and all hotels and clubs. The tiered structure of gaming machine tax, as specified in the table below, applied during 2012-13 Table 5-17 Previous tax rate on gaming machines in hotels Tasmania Federal Hotels total gross profit earned in a financial year MTR < $35 million 20.88% $35 million of excess 25.88% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 On and from 1 st July 2013, the tiered approach has been replaced by a flat tax rate of 25.88%. 19 An additional 4% Community Support Levy is derived from the annual gross profit. Victoria Table 5-18 Current tax rate on gaming machines in hotels Victoria Average Monthly per machine revenue Club Tax Rate $0 - $2,666 8.33% $2,667 - $12,500 50.83% $12,501 onwards 58.33% Source: New South Wales Treasury (2013), Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 As of 2012, taxation rates in Victoria are based on a progressive scale that applies to each venue s average monthly revenue per gaming machine. Gaming revenue is defined as the total amount wagered, less the return to players. Average monthly revenue per gaming machine entitlement is calculated by dividing each venue s total monthly revenue by the number of machines operating within the venue. The total gaming machine tax liability will be determined by multiplying the tax per machine rate by the number of machine entitlements held by the venue operator with respect to the venue for the relevant month. 20 19 Tasmanian Gaming Commission (2013) Annual Report 2012-13 20 Victorian Commission for Gambling and Liquor Regulation (2012) Gambling information sheet: taxation thresholds and marginal tax rates in 2012 17
Chapter 5 Gambling Taxation in Australia Keno Australian Capital Territory ACTTAB Keno is calculated at 2.53% of turnover. New South Wales Club and Casino: Hotels: 8.91% of player loss where player loss is less than or equal to $86.5 million 14.91% thereafter. 8.91% of player loss where player loss is less than or equal to $37.7 million 14.91% of player loss thereafter Northern Territory NT Keno tax rate is set at 20% of gross profit, reduced by the GST amount. Queensland Casinos: Jupiters Keno Keno Tax of 29.40% of monthly gross revenue, payable each month. In addition a quarterly licence fee of $209,200 is paid. Brisbane and Gold Coast Receive 25% commission on sales of Jupiters Keno and pay tax at 20% on commissions. Townsville and Cairns Receive 25% commission on sales of Jupiters Keno and pay tax at 10% on commissions. South Australia Keno is operated by SA Lotteries (now Tatts Ltd) 41% of net gambling revenue is paid into the Hospitals Fund. Tasmania Keno tax is calculated at 5.88% of annual gross profit Victoria Club Keno: 24.24% of player loss subject to a minimum player return of 75%. Western Australia Keno is only available at Crown Perth. Tax payable is calculated at the prescribed rate and reduced by the GST amount. Domestic: 18% of player loss. International: 11% of player loss. 18
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Lotteries Australian Capital Territory Lottery subscriptions are collected on behalf of the ACT by Victoria and New South Wales. The ACT receives 76.918% of player loss from New South Wales lotteries sold in the ACT. The ACT receives 79.4% of player loss on all Victorian games except soccer pools (57.52% of player loss). New South Wales 76.918% of player loss (player subscriptions net of prize liability) less GST payable on subscriptions and sales commissions on lotteries and soccer pools. Northern Territory Fees and taxes are set by way of agreement under the Gaming Control Act between a lottery licence holder and the Northern Territory. Agreements are commercial in confidence. Queensland 73.48% of gross revenue on lotteries 55% of gross revenue on instant scratch-its 45% of gross revenue on Golden Casket Lotteries 67.6% of gross revenue on soccer pools A licence fee of $209,200 per quarter is payable by Golden Casket Lottery Corporation. A licence fee of $8,800 per quarter is payable by Queensland Lottery Corporation. Increases in October of each year based on CPI. GST credit is provided. South Australia 41% of net gambling revenue from Lotto, Oz Lotto, Powerball, Super 66 and instant scratch tickets is paid into the Hospitals Fund. 41% of net gambling revenue from sports and special lotteries, eg. soccer pools, plus distributable surplus is paid into the Recreation and Sport Fund. Tasmania Tasmania has no state lottery. Tasmania receives 100% of duty paid to the Victorian Government for Tasmanian subscriptions to Tattersalls Lotteries. Victoria 79.4% of player loss on lotteries where GST is payable 90.0% of player loss on lotteries where GST is not payable 57.52% of player loss on soccer pools where GST is payable 68.0% of player loss on soccer pools where GST is not payable 19
Chapter 5 Gambling Taxation in Australia Western Australia 40% of net subscriptions (sales net of any add-on commission less prize liability) are paid to the State Pool Account; 12.5% of net subscriptions plus any surplus funds is paid to such eligible organisations as the Commission thinks fit and the Minister approves. 5% of net subscriptions is paid into the Sports Lotteries Account; 5% of net subscriptions is paid into the Arts Lotteries Account; and up to 5% of net subscriptions is used to support the Festival of Perth and the WA film industry. 20
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council On-course and off-course totalisator Australian Capital Territory On-course Off-course ACTTAB is obliged to make various payments to the ACT Government and the racing industry via the Racing Development Fund. A licence fee payable under a Deed of Agreement signed in 1996 which gives ACTTAB an exclusive 20-year licence for the provision of totalisator services in the ACT. The annual licence fee is payable to the ACT Government, paid monthly, equal to 10% of the present value of the estimated after tax profit of ACTTAB Limited for the 20 year period. New South Wales On-course 19.11% of player loss Fixed odds racing wagering is set at 10.91% of player loss. Off-course As above Northern Territory On-course Dependent on event. Tax rates are 40% of the licensee s commission on thoroughbred, harness and greyhound races. 20% of the licensee s commission for other races, events, sports and activities held in Australia. 10% of the licensee s commission applies to international races and sporting events. 21 Off-course As above Queensland On-course 20% of commission plus a quarterly licence fee of $206,000. Fixed odds racing wagering is set at 20% of commission. Off-course As above South Australia On-course Off-course Abolished SA TAB (fixed odds racing) pays a flat fee of $252,500 per month until 30/6/2016 when the current agreement expires. 22 Abolished 21 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 22 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 21
Chapter 5 Gambling Taxation in Australia Tasmania On-course Abolished. A fixed annual Totalisator Wagering Levy is paid by the licence holder. The levy s indexed annually and for 2013-14 it is $6.862 million. 23 Off-course Abolished. As above. Victoria On-course 7.6 % of player loss (from 16/8/2012). Under the former tax framework, tax payable for a wagering on-course permit was set at 19.11% of player loss. 24 Fixed odds racing wagering is set at 4.38% of player loss. Off-course As above Western Australia On-course Nil. Fixed odds racing wagering remains unchanged at 2% of turnover. Off-course Tax levied at 11.91% of gross revenue for off-course racing totalisator wagering. Fixed odds racing wagering is set at 2% of turnover. Other Gambling Taxes Queensland Interactive Tax: If a game is approved the rate of tax specified in that Act applies, otherwise the tax rate is 50% of gross profits. A quarterly licence fee of $74,200 is also payable. 23 Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 24 New South Wales Treasury (2013) Interstate comparison of taxes 2013-14: research & information paper, trp 13-02 22
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Tasmania Internet Gaming: With the abolition of sports betting and fixed odds wagering taxes the following Internet Gaming Endorsement applies - Within Australia: <$10 million gross profit 20% $10 million - $20 million 17.50% of excess >$20 million 15% of excess Major Lottery Endorsement: Outside Australia: 4% of total gross profits 35.55% of turnover RACING BETS LEVY (WA) The Racing Bets Levy is collected under the Racing Bets Levy Act 2009 (WA). The levy applies to all wagering operators nationally who use or publish West Australian race fields. Table 5-19 Racing Bets Levy (WA) State Thoroughbred Harness Greyhounds ACT 10% gross revenue 25 10% gross revenue 25 10% gross revenue 25 NSW 1% $5m annual turnover and The lesser of 1.5% of turnover 26 1.5% of turnover26 1.5% > $5m annual turnover or 15% of gross revenue 27 NT Nil Nil Nil QLD 1.5% of turnover 28 1.5% of turnover 28 1.5% of turnover 28 SA Contribution to the racing industry 29 The greater of 0.5% of turnover or 13% of gross proceeds 30 The greater of 0.5% of turnover or 13% of gross proceeds 30 TAS 10% gross revenue 10% gross revenue 10% gross revenue VIC 11.51% gross revenue 11.51% gross revenue 11.51% gross revenue WA 1% $2.5m turnover and 1% $2.5m turnover and 1.5% > $2.5m turnover 31 1.5% > $2.5m turnover 1% $2.5m turnover and 1.5% > $2.5m turnover Source: Government of Western Australia, Department of Treasury (2014) Overview of state taxes and royalties 2013-14 25 Only payable when wagering operator s annual turnover is over $1.5 million. 26 A 2% rate applies to Premium Race Meetings where prize money is equal to or greater than $150,000 for horse races or $30,000 for harness races. 27 Subject to a minimum payment of 0.75% of turnover. 28 Where cumulative wagering turnover is $5 million or more (1% if turnover is $5 million or less). 2% during May and June. 29 Varying amounts based on the time of year and wagering operator s revenues are paid to Thoroughbred Racing SA. The wagering operator can elect either a turnover or gross profit system. 30 Paid directly to Thoroughbred Racing SA. 31 A 2% rate applies for monthly turnover above $2.5 million between 1 st November and 1 st January each year (inclusive) for thoroughbred racing. 23
Chapter 5 Gambling Taxation in Australia NON GAMBLING TAXATION CONTRIBUTIONS While gambling taxes constitute, for the most part, the most significant taxation burden on the gambling industry there are several other taxation levies to which gambling providers may be subject including: Federal Government Taxes such as company income tax, good and services tax (GST) and fringe benefits tax (FBT); and Other State/Local Government taxes including payroll tax, stamp duties on property transfers and various local government rates and levies. (Please note that the available data for the casino industry is more current than that available for hotels and clubs and therefore cannot be directly compared). Both Clubs Australia and the Australian Hotels Association in their submissions on the 2009 Productivity Commission Draft Report into gambling made comment on the non-gambling taxation contributions of the club and hotel industry. Casinos In 2009-10, the total taxes paid to the Commonwealth, state/territory and local governments by the casino industry reached $1.2 billion, which represents approximately 30% of the total revenue generated by the casino industry. 32 Table 5-20 Casino Non-Gambling Contributions to Government (2009-10) Taxation Type $ Million Fringe Benefits Tax $4.0 Rates and Land Tax $19.0 Payroll Tax $54.0 Income Tax $236.0 GST $112.0 Other Taxes $45.0 Source: Australasian Casino Association (2011), ACA Economic Survey 2009-10 Clubs Table 5-21 Club Non-Gambling Contributions to Government (2006-07) Type of Taxation $ million Payroll tax 42 Land Tax 23 Personal Income Tax 33 164 Company Tax 34 71 Other Taxes 10 Source: Clubs Australia (2009) Submission to the Productivity Commission Inquiry into Australia s Gambling Industries. In 2011 Clubs in NSW alone were calculated to have paid approximately $1.4 billion in taxes (a figure which includes state gaming and other taxes, GST, FBT, Income tax, Payroll tax and sundry council rates and levies). 35 32 Australasian Casino Association (2011) ACA Economic Survey 2009-10 33 Calculated using tax paid on average earnings 34 Calculated based on 30% company tax rate 35 KPMG (2012) New South Wales Club Census 2011 24
A Database on Australia s Gambling Industry 2013/14 Australasian Gaming Council Hotels Hotels pay various taxes to the local, state and Commonwealth governments. PriceWaterhouse Coopers surveyed average expenditure on land tax, payroll tax and council rates in 2009 for the Australian Hotel s Association. 36 Table 5-22 Hotel Non-Gambling Contributions to Government (2009) Location Average Tax Expenditure Payroll Tax Land Tax Council Rate Australian Capital Territory $63,111 $3,814 $9,378 New South Wales $47,385 $32,580 $19,531 Northern Territory $50,860 - $22,077 Queensland $58,528 $25,816 $39,014 South Australia $49,236 $36,166 $37,768 Tasmania $52,205 $15,369 $38,764 Victoria $65,636 $59,611 $30,603 Western Australia $53,849 $21,768 $29,099 Australia $56,164 $38,324 $31,051 Source: PriceWaterhouse Coopers (2009) More than Just a Drink and a Flutter: An Overview of the Australian Hotel Industry 36 PriceWaterhouse Coopers (2009) More than just a Drink and a Flutter: An Overview of the Australian Hotel Industry 25