Punters To Feel Brunt Of NSW Tax Hike
NSW punters are expected to be the hardest hit from the decision of the state government to up the PoCT Tax levy from 10 to 15 per cent.
21 June 2022
NEW South Wales punters are expected to be the hardest hit from the decision of the state government to up the Point of Consumption Tax (PoCT) levy from 10 to 15 per cent.
The NSW Treasury announced the 50 per cent tax hike on Tuesday as part of its state budget for the 2023 financial year.
Of the monies received, 33 per cent will be returned to the racing industry, up from 20 per cent, with the remaining 67 per cent staying in government coffers.
The announcement comes hot on the heels of the Queensland government’s recent decision to increase the state’s PoCT tax levy from 15 to 20 per cent where 80 per cent of the revenue generated is now returned to the racing industry, up from 35 per cent.
The move was met by fierce criticism from major wagering operators who were said to be blindsided by the decision with no consultation.
It’s understood that the announcement by the NSW government will come as a far less surprise to wagering operators.
But with the cost of doing business in NSW set to escalate, it’s the punter that is expected to bear the brunt, predominantly through less attractive prices and higher margins.
“From a bookies point of view they really have three options,” said one industry source.
“They either absorb the additional tax or pass it on to the customer which can effectively make your offering less attractive to a rival that may look to absorb some or all of the cost.
“The third option is to be very deliberate on how and what you market to customers and if racing isn’t the top priority then it can be the case that the additional taxes do a disservice to the industry long term.”
Since the advent of the PocT tax, Racing NSW has accrued $81 million from the scheme including almost $40 million for the last financial year.
Those figures represent 72 per cent of the racing industry’s prior 20 per cent take out from the tax.
Harness racing receives 15 per cent while greyhound racing receives 13 per cent.
But unlike their commercial counterparts, the monies received by greyhound racing goes towards funding the NSW Greyhound, Welfare & Integrity Commission (GWIC).
The move, brokered two years ago, was orchestrated to relieve Greyhound Racing New South Wales (GRNSW) with the ongoing burden of funding the integrity arm of the industry.