New Victorian Point of Consumption Tax

[LookingForValue]

Matt Welsh
@Themodernpunter
From July 1, the Victorian Government has announced an increase in the Point of Consumption Tax from 8% to 10% of Net Wagering Revenue (NWR), bringing it in line with NSW. The Victorian Racing Industry's gross share of POCT receipts will increase from 1.5% to 3.5% of taxable NWR.

Robbing from the punter again?

[mardigras]

Yep, a downward cycle. Take more and more until there is no more to take, and the punters walk away.

[Freda]

Not trying to gainsay you, not at all....but would it be fair to say there is little evidence to show that NSW racing receipts are on a downward slide yet?

[mardigras]

4 hours ago, Freda said:

Not trying to gainsay you, not at all....but would it be fair to say there is little evidence to show that NSW racing receipts are on a downward slide yet?

The receipts to racing aren't down as yet. But the review of the charge for Vic etc are showing that the revenues to the betting operators are staying at the same level, but that the revenue is based on a declining punter turnover.

Which suggests that the punters are losing at a greater rate (because the operators are incorporating the charge into their pricing).

So as punters over time lose their level of allowable losses and even if that goes up in the short term, is that sustainable. The likes of Vic and NSW are only into this charge for around 2 years, what happens when the increased rate of losing being handed out to punters ultimately leads them to no longer be prepared to lose (or punt). There will always be a lag between the betting operators profits and the punters walking away due to the rate they lose at.

This reminds me a lot of things like commingling that was designed to increase punter investment. In the early days, punters carry on as normal because the impact of the change hasn't affected them. After 3 or 4 years of losing their money at a rate that is faster than it was, will all of them be happy to carry on losing it like that. I doubt it.

The POCT gets passed on to the punters, so the bookies are only going to be affected when the punter losses get reduced. But the idea is that punters will just keep on losing more and more in order to have the operators profits remain the same, with the added ability of more money going to the industry (and the government).

And yet, this is just another area where the government takes additional revenue from the industry (and returns a portion of that tax to the industry). Yet people here think that the Australian industry is giving massive amounts to racing. This is just another set of massive millions the state government is getting from racing to which they give a small percentage back to the industry. Although you often read opinion about how the governments there are so giving to the racing industry, whereas the NZ government is supposedly giving so little. How odd.

[Freda]

Gotcha.