Australia's Gambling Industries - Productivity Commission

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competition. Competitive bidding for such licences also can provide governments with information on the expected impact of the restrictions that are put in place. The following is a brief description of the key features of the taxes levied on different forms of gambling. This is followed by tables outlining the method and rate of taxation for each form of gambling in each jurisdiction. Racing taxation Totalisator racing Taxes on totalisator racing are usually levied on the value of bets placed at TABs and are typically around 5 to 10 per cent of gross wagers. This is the net percentage that is retained by the government. If the proportion of revenue that is earmarked for the racing industry is included, gross deductions average 14 to 20 per cent of the amount wagered. The residual (net of these gross deductions) is distributed as winnings. Gross deductions and government tax rates vary not only between on-course and off-course totalisator betting but often depend on the type of bet (such as, win/place, quinella, trifecta, superfecta etc) and whether a bet is in a combined totalisator pool scheme such as super TAB. Gross deductions and government tax rates are usually higher for quinella, trifecta, superfecta and other exotic bets. Bookmaker’s turnover tax The tax on bookmakers’ turnover on racing varies between states —ranging from one per cent in New South Wales and Queensland to two per cent in Victoria for most types of bets. However, in some jurisdictions tax rates vary depending on whether the bet is placed on a metropolitan or country race, local or interstate race and within or outside Australia. For example, in Victoria and South Australia the bookmaker’s turnover tax is higher for bets placed on metropolitan than country races. Similarly, in South Australia and Tasmania the tax is higher for bets on interstate events than local events and, in the Northern Territory the tax rate is higher for bets within Australia than other bets. In New South Wales, Western Australia and the ACT the tax does not discriminate between courses. There is also interstate variation in the allocation of revenue derived from bookmaker’s turnover tax. For example, in Queensland revenue forms part of the consolidation fund while in states such as Victoria and South Australia some of the revenue is earmarked for specific purposes such as hospitals, charities, recreation GAMBLING TAXES M.3
and sport development fund. In some cases, a proportion of the tax revenue is returned to racing clubs or sporting bodies holding the event. Taxes on sports betting The taxation of sports betting is similar to that of horse racing in that taxes apply to the amount wagered with the TAB. Gross deductions ranging from 17 per cent in Tasmania to 25 per cent in Queensland apply. The difference (net of these deductions) is paid out as winnings. The net percentage received by governments ranges from 4.5 in Tasmania to 10 per cent in Queensland. The remainder (gross deductions less government taxes) is usually divided between the TAB, the controlling sporting body and the Sport and Recreation Funds. Bookmakers’ tax for sports betting (that is, other than horse and greyhound racing) ranges from 1 per cent in Queensland to 2 per cent in Victoria and Western Australia. In Victoria, the tax rate is lower for country than metropolitan meetings. In Tasmania and the Northern Territory the tax rate is lower for bets from Australia and New Zealand than other bets. Box M.1 Payments to the racing industry All states and territories have arrangements for a proportion of the money spent on wagering to be paid to the racing industry. The arrangements in NSW and Victoria are outlined below. New South Wales In NSW, the TAB has, as a condition of its licence to run totalisator betting in NSW, entered into a Racing Distribution Agreement (RDA) with New South Wales Racing (NSWR) and the Racing Controlling Bodies. TAB is required to pay NSWR: • a product fee (21.64 per cent of net wagering revenue. Net wagering revenue is essentially the total amount wagered less payouts of winnings) • a Wagering Incentive Fee (25 per cent of wagering earnings. wagering earnings are essentially TAB’s gross revenue from wagering less costs and state taxes but before commonwealth taxes); and • a Gaming Incentive Fee (25 per cent of gaming earnings. gaming earnings are essentially TAB’s revenues from gaming less costs and state taxes but before commonwealth taxes) NSWR is also entitled to receive a contribution in respect of on-course totalizators. This contribution is 4.9 per cent of the total amount of wagers. continued M.4 GAMBLING
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Australia’s Gambling Industries I
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Contents of other volumes Volume 1
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Australian Capital Territory Federa
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Tasmania Wrest Point Casino New Zea
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Marianne James Prof Jan McMillen Pe
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Canberra, 30 November 1998 Senator
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Sydney, 16-17 September 1999 Rev Fr
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N Ward 28 Evelyn Jago 29 Territory
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Australian Hotels Association (SA)
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Women’s Health West 176 Norfolk I
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BetSafe Group - Paul Symond Consult
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B Participation in gambling: data t
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Table B.2 Participation in gambling
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Table B.4 Participation in gambling
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product in excess of the price paid
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C.2 Consumer surplus in the gamblin
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from increased consumption resultin
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Figure C.2 Tax and consumer surplus
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Table C.3 Price elasticities of dem
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Figure C.3 Consumer surplus for pro
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Box C.1 continued (e) That part of
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Table C.4 continued Wagering Lotter
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s n = share of gambling expenditure
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Figure C.6 Demand for gambling by p
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• the triangular area ’g’ whi
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The Commission’s treatment falls
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Box C.4 Explaining the lack of vari
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demand may become elastic, as peopl
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There are a number possible explana
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• Firstly, there has been extraor
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E Gambling in indigenous communitie
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The pattern of institutionally-base
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chase the “miracles” offered by
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F National Gambling Survey F.1 Intr
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F.2 The questionnaire Development o
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The use of this sampling approach m
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Box F.1 List of gambling activities
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• Big spending regular or less fr
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Questions asked of all respondents
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Comparisons of aggregate expenditur
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elated to their gambling — all
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Interview duration As with any ques
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ecause of non-payment), while there
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• post-weighting the sample data
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particular area/age/gender cell fro
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esult in turn reflects the survey p
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F.11 Contact and participation rate
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Being aware of the need to minimise
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NATIONAL GAMBLING SURVEY F.31
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F.52 GAMBLING
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F.54 GAMBLING
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F.56 GAMBLING
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F.58 GAMBLING
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F.60 GAMBLING
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F.62 GAMBLING
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F.64 GAMBLING
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F.66 GAMBLING
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G Survey of Clients of Counselling
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G.3 Question by question A1 to A3
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D23 — is concerned with the mecha
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of problem gambling (eg how many ch
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CLIENT SURVEY G.9
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CLIENT SURVEY G.11
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CLIENT SURVEY G.13
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CLIENT SURVEY G.15
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CLIENT SURVEY G.17
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CLIENT SURVEY G.19
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CLIENT SURVEY G.21
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CLIENT SURVEY G.23
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CLIENT SURVEY G.25
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Problem gamblers may subsequently b
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For a subset of 856 clients in 1996
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Table H.3 Variable Logistic estimat
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Prison, South Australia’s main re
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• “Has your gambling ever led y
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elicit information on vocational, f
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This finding is consistent with the
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H.5 What crimes do problem gamblers
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Other more violent crimes such as b
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But as noted above, police statisti
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H.8 Problem gambling and loan shark
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epayments were required — but mos
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State Gaming Authorities data The s
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Table I.2 Unweighted estimation Med
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machines. There is no statistically
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Figure I.2 Expenditure on gaming ma
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Weighted results The Commission’s
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Table I.7 Summary of Victorian metr
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Table I.9 Summary of Queensland reg
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it is likely to represent the more
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Table J.1 presents the information
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suffer from some of the adverse con
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• costs of gambling counselling s
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To the extent that borrowed money i
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This fee is only taken in estates w
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• for a higher estimate, the numb
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The Commission has assumed that the
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• to estimate the income lost ove
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the Commission has used this estima
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• 336 people receiving a jail sen
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Page 223 and 224: As indicated in table J.6, where pr
Page 225 and 226: seen as part of the informal contra
Page 227 and 228: Almost all divorce cases are uncont
Page 229 and 230: of their gambling during the period
Page 231 and 232: Suicide ideation The Commission’s
Page 233 and 234: Table J.10 continued People a Per p
Page 235 and 236: Table J.12 Value of annual transfer
Page 237 and 238: pathological and problem gamblers a
Page 239 and 240: Table K.2 Summary of cost estimates
Page 241 and 242: L Survey of Counselling Services Th
Page 243 and 244: Several academics working in the ar
Page 245 and 246: L.4 Survey results Nature of agenci
Page 247 and 248: Number of clients The survey includ
Page 249 and 250: Characteristics of gambling clients
Page 251 and 252: counselling because of someone else
Page 253 and 254: Table L.17 Full time equivalent pai
Page 255 and 256: Table L.20 Approaches used to help
Page 257 and 258: Table L.24 Gambling clients ending
Page 259 and 260: More specifically, agencies said fu
Page 261 and 262: Centacare (Whyalla) Centre for Anxi
Page 263 and 264: SURVEY OF COUNSELLING SERVICES L.23
Page 271: Table M.1 Major forms of gambling t
Page 275 and 276: Tax on keno In New South Wales, the
Page 277 and 278: Poker machines In most states, lice
Page 279 and 280: Table M3: Gaming machine taxation b
Page 281 and 282: Table M3: (continued) Hotels: Levie
Page 283 and 284: Table M4: (continued) NSW VIC QLD W
Page 285 and 286: Table M5: (continued) OTHER GAMBLIN
Page 287 and 288: N.1 Characteristics of machines of
Page 289 and 290: Table N.1 Australia, Japan, United
Page 291 and 292: Table N.2 Australia, Indiana, Conne
Page 293 and 294: The following discussion of gaming
Page 295 and 296: Canada Broadly speaking, Canada has
Page 297 and 298: Figure N.4 Japanese pachislo machin
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Page 305 and 306: N.2 Market segments As with many ot
Page 307 and 308: Box N.4 Comments on market segments
Page 309 and 310: O Displacement of illegal gambling?
Page 311 and 312: survive together because they cater
Page 313 and 314: P Spending by problem gamblers The
Page 315 and 316: Table P.1 Outlays, player losses an
Page 317 and 318: Table P.3 Concentration of outlays
Page 319 and 320: Figure P.2 Distribution of outlay b
Page 321 and 322: Table P.4 Expenditure shares of pro
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is adjusted for biases in its estim
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ACIL (sub. D233. p. 48) claimed tha
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P.5 Estimating the expenditure shar
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expenditures shares are shown in ta
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of counselling agencies is necessar
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Table Q.2 Employment status of prob
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Table Q.3 continued Study Average a
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Relationship status The greater inv
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Table Q.6 Gender of problem gambler
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The pattern of an increased feminis
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R Bankruptcy and gambling This appe
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Table R.2 Age profile of bankrupts,
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Table R.5 New bankruptcies per mill
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Figure R.2 continued Western Austra
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• The penalty has become less sev
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S State and territory gambling data
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Table S.4 Real government revenue f
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Table S.8 Real government revenue,
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Table S.12 Real government revenue
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Dickerson et al (1998, p. 79) for e
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However, the survey used a set of p
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T.3 The logistic approach The NORC
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Table T.3 Method Various estimates
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such as France and the US (Casino I
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Table U.2 An example of an outcome
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intensity on the 85.15 per cent Cas
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considers that the machine price
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egular playing (30 years) the proba
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for an amount of time that is less
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U.6 The gambler’s fallacy Gambler
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This does not mean that a person ca
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V Use of the SOGS in Australian gam
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Differences in question wording and
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References AADAC (Alberta Alcohol a
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—— 1998, Efficient Tobacco Taxa
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Bickerdyke, I. and Lattimore, R. 19
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——, Dickerson, M. and Harley, B
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Campbell, C. and Smith G. 1998, Can
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—— and Winefield, A.H. 1996, Co
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——, Baxter, P., Boreham, P., Ha
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Ferguson, B. 1996, A Note on the In
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—— 1997, Legalised Gambling as
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Horner, T. and Bradfield, G. 1998,
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——, Marston, A., Singer, R., Wi
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Gambling Studies, ‘Towards 2000:
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—— 1995b, Social impacts of urb
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—— and Ohtsuka, K. 1999, ‘The
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NT Select Committee (Select Committ
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Prosser, G., Breen, H., Weeks, P. a
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Single, E., Collins, D., Easton, B.
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Thomas, S., Jackson, A., Thomason,
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—— 1997, Gambling and Problem G
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Australia's Gambling Industries - Productivity Commission

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