Calculating net wagering revenue
Wagering and betting tax is payable on your net wagering revenue.
Net wagering revenue
Net wagering revenue is calculated including GST. Each financial year, the first $1 million of net wagering revenue is tax-free. Tax is payable at 15% on any amount above this threshold.
The tax payable on a wagering and betting entity’s net wagering revenue is calculated as follows:
- For entities that take wagers and bets directly from customers – 15% of the net amount of revenue earned (total amount of all bets minus winnings paid).
- For entities that facilitate wagers and bets (i.e. operating a totalisator, a betting exchange or acting as an agent) – 15% of the commissions earned from facilitating the wagering and betting activity.
Entities that directly take wagers and bets and also facilitate wagering and betting activity combine their revenue from each source to work out their total net wagering revenue.
Example 1
| Month | Net wagering revenue for month | Net wagering revenue for year to date | Tax-free balance (of $1,000,000) | Taxable net wagering revenue for month | Tax payable |
|---|---|---|---|---|---|
| July | $300,000 | $300,000 | $700,000 | Nil | Nil |
| August | $200,000 | $500,000 | $500,000 | Nil | Nil |
| September | $400,000 | $900,000 | $100,000 | Nil | Nil |
| October | $600,000 | $1,500,000 | Nil | $500,000 | $75,000 |
| November | $300,000 | $1,800,000 | Nil | $300,000 | $45,000 |
| December | $200,000 | $2,000,000 | Nil | $200,000 | $30,000 |
| Total | $150,000 | ||||
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Example 2
| Month | Net wagering revenue for month | Net wagering revenue for year to date | Tax-free balance (of $1,000,000) | Taxable net wagering revenue for month | Tax payable |
|---|---|---|---|---|---|
| July | $300,000 | $300,000 | $700,000 | Nil | Nil |
| August | –$100,000 | $200,000 | $800,000 | Nil | Nil |
| September | $1,200,000 | $1,400,000 | Nil | $400,000 | $60,000 |
| October | –$50,000 | $1,350,000 | Nil | Nil | Nil |
| November | $200,000 | $1,550,000 | Nil | $200,000 – $50,000 = $150,000 | $22,500 |
| December | $300,000 | $1,850,000 | Nil | $300,000 | $45,000 |
| Total | $127,500 | ||||
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Types of bets and entities
Net wagering revenue can depend on the type of bet or entity.
Fixed odds bets
Net wagering revenue equals:
- the total amount of all bets placed with the entity during the relevant period by people located in Victoria at the time of making the bets, including:
- fixed odd bets
- totalisator derived odds bets
- the face value of any free bets
- bet-backs
- minus the total amount of all winnings paid or payable during the relevant period to people located in Victoria at the time of making the bets.
Pari-mutuel bets (when an entity operates a totalisator or acts as an agent)
Net wagering revenue equals:
- the total commissions received by the entity for accepting bets made, or providing a service through which bets are made, by people located in Victoria at the time of making the bets or using the service
- plus the total amount retained by the entity because of rounding fractions in the calculation of winnings paid out in respect of the bets.
Betting exchanges
Net wagering revenue equals the total commissions received by the entity in relation to bets made through the betting exchange by people located in Victoria at the time of making the bets.
Free bets
Free bets made with a wagering and betting entity are included as bets in calculating net wagering revenue. There is no reduction in net wagering revenue for awarding or providing free bets to customers.
When a bet is made up of a free bet plus the customer’s own money, the combined amount is the total bet amount.
Calculating net wagering revenue including free bets
Net wagering revenue = bets received (including face value of free bets) – winnings paid or payable (including net winnings from free bets).
Calculating net wagering revenue where free bets are offered
Bet-backs
Bet-backs received from a wagering entity are treated as any ordinary bet received.
Any bet-backs placed with another entity are not included in your calculation of net wagering revenue (including the amount of bet-backs placed or winnings returned from a bet-back).