Australia -- Consumption Tax Contemplated for Interstate Operators

The government of South Australia has seen what has gone on in the United Kingdom, and they want their piece of the action. They are strongly considering implementing what would be known as a Point of Consumption Tax which is going to be assessed on interstate gaming operators that do business with citizens within their state.

Seemingly it has become frustrating that 74,000 South Australian residents have online accounts with companies that are not subject to be taxed at all, aside from a one-time fee of $1500 that allows them to operate. It appears that they have had enough of that. According to the Treasury, if they are going to be generating profits based on the gaming activity of people from within South Australia, they are going to ante up for the privilege. And that goes way beyond just a simple fee in order to be licensed.

So they are looking at revenues that will total around $47 million on a yearly basis. That would amount to about 13% of all revenues taken in by South Australia that are gaming-related.

What they seek here is to establish some "balance" between those operating on an online basis and in the land-based locations. Obviously it is much easier to operate online, from the standpoint of expenses, so there is a certain natural advantage those operators have.

And there may be changes when it comes to how tightly these companies are watched. At the moment, they are required to give over a report to the South Australian Treasury as to how much business they are doing within the state, but all of this is generated by themselves; in other words, they are coming up with the numbers that their accountants give them. What may start to happen is an emulation of what has been established by the UK Gambling Commission, which requires very strict compliance and meticulous auditing. That would mark a major change in the way the state is doing business with the online casino operators.

It is no secret that the people from the government are referring to the UK model, so the online folks should expect that it is not going to be a cakewalk from here on in. The bottom line here is money, not necessarily consumer protection, and the South Australians are expected to put together some information for the other states on what could work on more of a national basis. It is not likely that this will discourage many gaming operations from dealing with South Australians, but it will just make it more of a pain in the neck to do so.

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