Sportsbet Pushes Back On South Australian Government's Tax Plan (update)

Betting company scraps plans for a A$20 million high tech data facility in Adelaide

Online betting company Sportsbet pushed back against the South Australian government's proposed 15 percent place-of-consumption NGR tax this week by scrapping plans for a $20 million high-tech data facility in Adelaide.
The announcement by Sportsbet that it would take its expansion plan elsewhere followed a week in which major Australian online betting companies mounted a public campaign against the tax, warning that it could have consequences for punters and operators alike, and accusing the government of a "short-sighted money grab" demonstrating a lack of understanding of the internet.
The scrapping of the data centre was accompanied by the termination of Sportsbet's sponsorship of the Gawler Racecourse in favour of an initiative in the Victoria province.
"It makes no business sense for Sportsbet to extend its relationship with Gawler due to the uncertainty created by the South Australian Government," said Ben Sleep, CEO of Sportsbet, in a statement.
"If the Government was to turn around tomorrow and ban bookmakers from advertising or sponsoring events in the state, much like its decision to introduce the unfair Punters Tax, Sportsbet could be liable to pay for advertisements and sponsorships we can't use.
"We are really disappointed to end our association with Gawler, and while we remain committed to supporting regional racing across Australia, sadly it won't be in SA."
Announcing the Sportsbet decision to take its data centre project elsewhere, Sleep said that the investment would have supported other such facilities in Darwin and Melbourne, delivering millions of dollars of ongoing investment each year through maintenance, servicing and enhancements.
That investment would now be redirected to the Northern Territory, he said, referring to an Australian provincial licensing territory favoured by most operators due to its reasonable licensing and taxation regime.
"The South Australian Government's decision to introduce its Punters Tax without industry consultation has created significant uncertainty, with South Australia now considered a high-risk investment destination for any Australian-based bookmaker," Sleep claimed.
"Sportsbet cannot invest tens of millions of dollars into a state where its government has shown that it is willing to significantly move the goal posts without consultation with those most affected."
Sleep said thousands of customers had "voiced concern" about the proposed tax through petitions and online feedback.
The South Australia Social Service (SACOSS) reacted to the Sportingbet announcement by urging the provincial government to adhere to its increased tax plan, claiming that the betting company's actions were "outrageous and unsporting."
In a statement the acting CEO of the welfare body, Greg Ogle, pointed out that Sportsbet made net revenue of A$470 million last year — a 41 percent increase on the previous year and a profit increase of 54 percent.
"But because Sportsbet is registered in the Northern Territory, which caps wagering tax at A$550,000 per annum, this huge growth in revenue would see no increase in the gambling tax paid," he said, adding a speculative comment that the company's advertising against the proposed tax "must be costing millions of dollars."
Ogle characterised the Sportsbet push back as "an absolute dummy spit."
"The proposed wagering tax is an important way to ensure that profits from South Australian betting are taxed in SA, and can be directed to services for South Australians — including support for the problem gamblers that live here and not in virtual tax havens where corporate bookies may choose to nominally reside," Ogle claimed.
South Australian acting Treasurer John Rau hewed to the SACOSS line, pointing out that Sportsbet made a record A$117 million from Australian punters last year, "including many in South Australia."
Rau claimed that Sportsbet had previously floated the concept of a "cloud-based server" based in SA "as a backup for their NT operations, as the company was concerned that internet access in the NT was vulnerable".
"It is strange that they propose to consolidate in what they have described as a risky jurisdiction," he said, reiterating the government view that if betting companies are making profits from South Australian punters they should be paying tax in South Australia.

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