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Wagering and betting tax
Wagering and betting agencies that make net wagering revenue over an annual threshold pay a point of consumption tax.
Who pays the tax?
Wagering and betting entities pay the tax on their net wagering revenue, including GST, from customers located in Victoria at the time of making a bet.
Wagering and betting entities include:
- a registered bookmaker
- the wagering and betting licensee in Victoria
- any person registered or licensed in Victoria, or another state or territory, to accept bets or provide a service through which bets are made.
Taxable wagering and betting types
There are several types of wagering and betting products that can be offered in Victoria, including totalisator, fixed odds, simulated (trackside) racing and betting facilitated by a betting exchange or other commission-based agent. This tax applies to net wagering revenue derived from these types of wagering and betting activities.
Tax-free threshold and tax rate
The wagering and betting tax applies at a rate of 15% of net wagering revenue, including GST, from customers located in Victoria in excess of the tax-free threshold of $1 million.
How the tax is calculated
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 determine their total net wagering revenue.
| 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 |
| 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 |
Free bets
What are free bets?
Free bets (sometimes called bonus 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.
Free bet is defined to mean a bet made wholly or partly without the customer providing or paying any money for the bet or any part of the bet.
Examples of free bets include:
- an amount provided by a wagering and betting entity to a customer for the customer to make a bet with
- an amount representing a bonus on a previous winning bet
- an amount representing a refund of all or part of the staked amount for a previous non-winning bet
- an amount 'purchased' or 'paid for' by the customer using credits, points, loyalty rewards or other non-monetary consideration.
What is the face value of a free bet?
Where a free bet is offered in conjunction with customer consideration, the face value of the free bet is the total bet amount.
Calculating net wagering revenue inclusive of free bets
Net wagering revenue = bets received (including face value of free bets) – winnings paid or payable (including net winnings in relation to free bets).
Example
ABC Pty Ltd offers a free bet with a face value of $10 to a customer. The customer places a $30 bet ($20 of their own money and the $10 free bet). This entire bet is considered a free bet with a face value of $30.
How to calculate net wagering revenue where free bets are offered
Example 1
ABC Pty Ltd provides a free bet with a face value of $25 to a customer. The customer places a bet with odds of 3.4 to win.
The bet wins and returns a gross winnings of $85.
The effect of the net wagering revenue for the above bet is calculated as follows:
Step 1 – calculate the net winnings for a free bet
Net winnings for a free bet = gross winnings for a free bet – face value of the free bet
Net winnings: $85 – $25 = $60
Step 2 – calculate the net wagering revenue
Net wagering revenue = bets received (including face value of free bets) – winnings paid or payable (including net winnings in relation to free bets)
Net wagering revenue: $25 – $60 = –$35
Example 2
ABC Pty Ltd takes the following bets from Victorian players for the month of July:
Fixed odds bets: $200,000
Free bets: $50,000
Winnings in relation to ordinary bets: $100,000
Face value of winning free bets: $10,000
Gross winnings in relation to free bets: $25,000
Step 1 – calculate the net winnings for free bets
Net winnings for a free bet = gross winnings for a free bet – face value of the free bet
Net winnings: $25,000 – $10,000 = $15,000
Step 2 – calculate the net wagering revenue
Net wagering revenue = bets received (including face value of free bets) – winnings paid or payable (including net winnings in relation to free bets)
Bets received: $200,000 + $50,000 = $250,000
Winnings: $100,000 + $15,000 = $115,000
Net wagering revenue: $250,000 – $115,000 = $135,000
Determining a customer’s location
The customer’s location is assessed at the time of placing a wager or bet, or using a betting service, for example, placing a bet through a betting exchange.
On course and in-person wagers and bets
Any bets placed at a Victorian venue are captured based on the location where the transaction occurs.
Online and phone wagers and bets
Operators must take all reasonable steps to ensure that bets placed online or over the phone are captured based on the physical location (geo-location) of the customer at the time of making the bet.
In recognition that it may be difficult for some operators to identify the physical location of a customer, operators are permitted to rely on specified address information given to them by customers as being the location of a person making a bet.
Operators can rely on the customer’s residential address if the customer is an individual, or the customer’s principal place of business if the customer is a corporate customer.
However, an operator cannot rely on the specified address information if the betting operator knows, or has reasonable grounds to suspect, that the address is not the location of the person when they make the bet.
In relation to commissions earned by betting exchanges, only those charged to customers located in Victoria at the time of placing the bet or using the service are captured.
We undertake compliance activities to ensure that customer address information is accurate, with interest and penalty tax potentially applying where a betting operator or exchange fails to pay the tax.
Grouping
Businesses may be grouped together and effectively treated as a single entity for wagering and betting purposes so that only one tax-free threshold is claimed by the group for the relevant financial year.
A wagering and betting group exists where:
- the businesses are related bodies corporate within the meaning of s50 of the Corporations Act 2001 (this situation is commonly known as a holding and subsidiary relationship).
- the same person has (or the same persons together have), a controlling interest in at least 2 businesses.
A wagering and betting entity includes all bodies and associations (corporate and unincorporated) partnerships and a trustee of a trust.
A corporation has the same meaning as in s9 of the Corporations Act 2001 (Cth).
Administration
We are responsible for administering the tax, including collecting the tax and managing compliance.
Reporting requirements
Register
If you are liable to pay the tax, you need to register with us before the end of the first month in which you become liable.
Lodge a return and pay the tax monthly
Once registered, you must submit a return and pay the tax monthly:
- Returns and payment are due within 30 days of the end of each month.
- You must submit a return even if no tax is payable for the month.
Lodge a return and make a payment
Reporting requirements for groups
Register
If the total net wagering and betting revenue of all the members in the group exceeds the tax-free threshold for the financial year, each of the entities is jointly and severally liable to pay the tax.
Members of a group must nominate a member to be the Designated Group Entity. The Designated Group Entity needs to register with us before the end of the month in which the group becomes liable to pay the tax.
Lodge a return and pay the tax monthly
Once registered, the Designated Group Entity must lodge a return on behalf of the group and pay the tax monthly:
- Returns and payment are due within 30 days of the end of each month.
- The Designated Group Entity must submit a return even if no tax is payable for the month.
Lodge a return and make a payment
Cancel your registration
If circumstances change and you are no longer liable for the tax and do not expect to incur any liability in the future, you must let us know and submit a final return within 14 days of no longer being liable for the tax.
You can cancel your registration via the online portal.
Managing your registration
You can update your details at any time via the online portal:
- update your registration
- manage user access
- manage members of a group.
Keep up to date
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Last modified: 27 August 2024
News and updates
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27 June 2024
Changes taking effect on 1 July 2024
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20 November 2023
Our 2022–23 Annual Review is now available
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3 October 2023
State Taxation Acts and Other Acts Amendment Bill 2023
