Added: December 18, 2014
Really? Consider what is going on here. In no uncertain terms, Senator Nick Xenophon made it clear that in his considered opinion, online bookmakers aren’t paying their fair share. That’s fascinating when you take a look at what is really going on.
Consider the example the Honorable Senator was pontificating about. After reviewing a report that showed that in the Northern Territory last year, there was AU$2.5Million in taxes collected. Yes, that’s right. Two and a half million. But apparently that just doesn’t cut it. They aren’t paying enough. In this case, the Senator was looking at how much money these online betting companies took in last year. That is, from the sounds of things, his eyes were popping out of his head when he saw the actual revenue numbers of AU$8.5 Billion in sports bets.
But hold on a second. The existing law says that each licensed online bookmaker must pay 10 percent tax on the betting profits. For this tax, betting profits is simply defined as the monetary total of all bets wagered minus the the total of all payouts. The result is then taxed at the statutory 10 percent. So, back to the example above. The online betting companies in the Northern Territory paid their ten percent tax. What is the issue here?
According to the Senator Xenophon, its not the tax rate that is the issue. Instead the problem is that this statutory ten percent tax rate actually has a top end cap attached to it. As of now, the cap is set at AU$250,000 for the previous five years. Only this past year was this cap increased all the way to AU$500,000. As you can see, the cap just doubled.
But that is not enough for Senator Xenophon. He was quoted as saying “online wagering companies must be laughing all the way to their offshore bank accounts. The government of the Northern Territory needs to squeeze more money out of these operators”.
At the same time, not every one agrees with Senator Xenophon. In fact, Northern Territory Chief Minister Adam Giles was mum on the issue refusing to make a statement either way on the amount of tax being paid. On the other hand, the Chief Minister was quick to point out that its not just about the taxes collected. He reminded the Senate of the various financial spinoffs that have in fact made the online gambling industry a key component of the economy.
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