Wagering and betting tax – frequently asked questions
- Did the tax replace existing wagering taxes?
- Does the tax capture all types of gambling or just wagering and betting?
- Does the tax apply to wagering products in other states?
- How does this apply to overseas bookmakers?
- Are Victorian bookmakers subject to the tax?
- What is the role of the Victorian Commission for Gambling and Liquor Regulation under the tax?
- How is the tax enforced against wagering and betting entities?
- Is net wagering revenue, the GST inclusive amount?
- How is net wagering revenue calculated?
- Is a bet included in the calculation of net wagering revenue when the bet is placed, or on settlement of the bet?
- Are bets placed before 1 January 2019 taxable?
- How are free bets treated?
- How are odds boosts treated?
- How are bet-backs treated?
- Does the wagering and betting tax impact licence allocation arrangements?
- Will the tax be reviewed?
- Are there accompanying regulations?
- If a bet is placed in a foreign currency, what should I report the amount of the bet as?
Yes. Previously, only the Victorian wagering and betting licence holder Tabcorp was liable to pay Victorian wagering tax. This was regardless of whether its customers were located in Victoria or in another state or territory. These arrangements were replaced by the point of consumption wagering and betting tax on 1 January 2019.
The tax applies to all wagering and betting activities. Other gambling products, including electronic gaming machines (pokies), casino games, lotteries, Keno, raffles, bingo and scratch cards are not subject to the tax.
Wagering and betting entities that offer customers located in Victoria the ability to bet on the outcome of other gambling products without entering the relevant draw or pool (for example, betting on the result of an overseas lottery, otherwise known as ‘synthetic’ lottery betting) are subject to the tax.
Yes. If a wagering and betting entity accepts bets from customers located in Victoria, they are subject to the Victorian tax, irrespective of where the product is offered or where the entity is registered or licensed.
An operator licensed only outside of Australia does not fall within the definition of a 'wagering and betting entity' and is not subject to the tax.
Under Commonwealth law, it is illegal for offshore operators to provide betting services to Australian customers. Overseas operators that legally operate in Victoria and are registered with, or hold a licence in, an Australian state or territory fall within the definition of a wagering and betting entity, and are liable for the tax on bets accepted or facilitated for customers in Victoria.
Yes, however the majority of on-course bookmakers are unlikely to exceed the annual $1 million net wagering revenue tax-free threshold and are therefore unlikely to be liable for the tax.
The Victorian Commission for Gambling and Liquor Regulation continues to regulate Victoria’s gambling industry. The State Revenue Office is responsible for administering and collecting the tax, as well as other functions such as ensuring compliance with tax obligations.
The Taxation Administration Act 1997 (Vic) gives the Commissioner of State Revenue the power to undertake various compliance and enforcement activities. In addition, the Commissioner can impose administrative penalties and interest for tax defaults, such as late payments, non-payments or under-payments.
The net wagering revenue of an entity for the purposes of the wagering and betting tax is the GST inclusive amount.
The net wagering revenue of an entity includes revenue derived from all wagering and betting activities by consumers located in Victoria.
Calculating net wagering revenue for fixed odds bets
The total amount of all bets (including free bets) placed with the entity during the relevant period by persons who were located in Victoria at the time of making the bets.
+ the total amount of any bet-backs received from another entity located in Victoria
- the total amount of all winnings paid or payable during the relevant period to persons who were located in Victoria at the time of making the bets (excluding the amount of any bet-backs made by the entity in respect of those bets with another entity)
= Net wagering revenue
Calculating net wagering revenue for pari-mutuel bets
(i.e. when an entity operates a totalisator or acts as an agent)
The total commissions received by the entity for accepting bets made, or providing a service through which bets are made, by persons who were located in Victoria at the time of making the bets or using the service
+ the total amount retained by the entity as a consequence of the rounding of fractions in the calculation of winnings paid out in respect of the bets
= Net wagering revenue
Calculating net wagering revenue for betting exchanges
The total commissions received by the entity in relation to bets made through the betting exchange by persons who were located in Victoria at the time of making the bets.
Calculating net wagering revenue for an entity that takes direct bets and faciliates wagering and betting activity
Entities that take bets directly and also facilitate wagering and betting activity will combine their revenue from each source to determine their total net wagering revenue.
Is a bet included in the calculation of net wagering revenue when the bet is placed, or on settlement of the bet?
Fixed odds bets should be included in the calculation of net wagering revenue at the time the bet is placed with the wagering and betting entity. Any subsequent payout relating to the bets (including winnings or a refund of the bet amount if the bet is cancelled) would be included in the period in which the payout is paid or becomes payable.
In January 2019, a customer places a $100 bet on the outcome of the 2019 Grand Final. The net wagering revenue for January would include the $100 bet.
If the outcome of the bet in September results in a payout to the customer of $200, the wagering and betting entity would claim a deduction for the $200 payout in their September return.
No. Bets placed before 1 January 2019 on an event which takes place on or after 1 January 2019 are not included in the calculation of the net wagering revenue under the new wagering and betting tax regime.
Similarly, the subsequent payout of any winnings from those bets cannot be claimed as a deduction in the calculation of an entity’s net wagering revenue.
In November 2018, a Victorian customer placed a $100 bet on the outcome of the 2019 Grand Final. As the bet was placed before 1 January 2019, it is not included in the calculation of the net wagering revenue of the wagering and betting entity. Similarly, if the bet results in a $200 payout to the customer, the entity cannot claim a deduction for the payout, as the relevant bet was placed before 1 January 2019.
In February 2019, a wagering and betting entity (that operates a totalisator) receives a $100 commission for accepting a bet made by a Victorian customer on 1 December 2018. The bet is not included in the entity's calculation of its net wagering revenue because it was placed before 1 January 2019.
In February 2019, a wagering and betting entity (that operates a betting exchange) receives a $100 commission in relation to a bet made through a betting exchange by a Victorian customer on 1 December 2018. The bet is not included in the entity's calculation of its net wagering revenue because it was placed before 1 January 2019.
Free bets made with a wagering and betting entity are included as bets accepted in calculating net wagering revenue, with no reduction in net wagering revenue allowed for awarding or providing free bets to customers.
What are free bets?
Free bets are a promotional activity undertaken by wagering and betting entities to attract consumers to gamble with them, similar to giveaways or any other promotional activities that are not deductible from the entity’s wagering revenue. Free bets include any credits, loyalty rewards or other bonuses/coupons that allow a customer to bet without using their own cash.
Free bets create a new betting transaction whereby a customer must wager the funds before any winnings can be withdrawn.
Any winnings paid out under promotional activities that amend the odds offered to a customer where the customer funds the entirety of the bet with their own money, including ‘odds boosts’, are treated in the same way as ordinary winnings paid out on the bet. That is, the winnings paid to customers are subtracted from net wagering revenue.
Bet-backs are treated as any ordinary bet received.
Bet-backs do not impact the net wagering revenue of the wagering and betting entity placing the bet-back, regardless of whether the bet-back is successful or not. This treatment ensures that the bet-back is treated as a separate transaction and reflects the fact that a wagering and betting entity may place a bet-back to hedge bets accepted from customers not located in Victoria.
However, for any wagering and betting entity receiving a bet-back from a Victorian wagering and betting entity, the entity receiving the bet-back must include it as part of its calculation of net wagering revenue. This ensures a bet-back received from a Victorian wagering and betting entity is treated as if it were a bet received from any other customer located in Victoria.
In the case where a wagering and betting entity receives a bet-back from a non-Victorian wagering and betting entity, there is no impact for the purposes of the Victorian wagering and betting tax as the bet-back is placed outside of Victoria.
A customer makes a $10 bet with Bookmaker 1 (located in Victoria), who lays-off the bet with Bookmaker 2. The bet wins and returns $12 to Bookmaker 1, who must also return $12 to the customer.
- $10 bet from the punter is included as net wagering revenue.
- $12 paid in winnings to punter is included in net wagering revenue.
- Net $2 return from the bet-back ($12 winnings minus $10 lay-off bet) is not included in net wagering revenue.
Bookmaker 1’s net wagering revenue is -$2.
- $10 bet-back received is included in net wagering revenue.
- $12 return paid out on the bet-back received is included in net wagering revenue.
Bookmaker 2’s net wagering revenue is -$2.
What are bet-backs?
A bet-back (or ‘lay-off’) is a hedge made by a wagering and betting entity to reduce the level of risk held on a particular outcome. To make a bet-back, a wagering and betting entity places a bet with a second wagering and betting entity as a customer of that second entity. If the bet-back outcome is successful, the second entity pays out winnings to the first entity (the entity which makes the bet-back) as it would for any other bet accepted from another customer.
The wagering and betting tax does not impact licence allocation arrangements.
A review of the tax will be conducted and laid before each House of Parliament on or before 1 December 2020. The Treasurer will consult the Minister for Racing and the Minister for Consumer Affairs, Gaming and Liquor Regulation on the review's terms of reference.
The Act enables further reviews to be conducted from time to time.
There were no Regulations in place for the start of the tax. Provisions were included in the Act to enable the creation of future regulations to respond to potential changes in the wagering and betting market.
Any amount in the calculation of the net wagering revenue, including a bet, a payout or a commission, to the extent it is stated in a foreign currency, is taken to be the amount expressed in Australian dollars according to the exchange rates published by the Reserve Bank of Australia on the day on which the liability to pay the tax arose.
For practical and sensible administration, the entity may alternatively choose to use the exchange rates published by the Reserve Bank of Australia on the day on which the amount incurs (i.e. the day on which the bet is made, the winnings are paid or payable, the commission is received).
Under either option, if the rate is not obtainable for Victoria on that day, entities may use the rate published on the last day before the day on which the rate was obtainable for Victoria.