Gaming insights

Australian state becomes first to implement “place of consumption” tax on online gaming companies

Written by Ben Blaschke

South Australia will become the first Australian state to implement a “place of consumption” tax after announcing that all gaming companies offering services to South Australians will be slugged with a 15 percent tax on net gaming revenue from 1 July 2017.

The tax will apply to all forms of gambling including sports betting and horse, harness and greyhound racing.

State treasurer Tom Koutsantonis said the tax was an important step in ensuring South Australia received some of the benefit with around AU$9 million expected to be raised annually.

“The betting industry is rapidly changing and our tax regime needs to change with it,” Koutsantonis said.

“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.

“By implementing a wagering tax based on the place of consumption, we are ensuring that businesses are paying taxes in the jurisdiction in which they are making their money.”

Ironically, the move could potentially pave the way for other operators such as online poker rooms or casinos to be allowed to legally offer their services to Australians. At present, neither are allowed to do so under the country’s outdated Interactive Gambling Act 2001.