The three peak bodies representing the Victorian Racing Industry (VRI), Racing Victoria (RV), Harness Racing Victoria (HRV) and Greyhound Racing Victoria (GRV), note the announcement on Monday by the Victorian Government regarding the implementation of a Point of Consumption Tax on wagering from 1 January 2019.
The Victorian Government has announced that all Wagering Service Providers (WSPs) will be required to pay a Point of Consumption Tax of 8% of the net wagering revenue derived from Victorian residents from all forms of wagering, including races conducted by the VRI.
To ensure that the VRI and each racing code within it are no worse off, the Government has announced that it will be contributing 1.5% of the taxable net wagering revenue from Victorian residents on all forms of wagering to the VRI to offset the potential negative impact on wagering turnover and the resulting income that the VRI receives from all WSPs.
VRI Spokesman and RV Chief Executive, Giles Thompson, said, “Our discussions with the Government have been very positive and we are pleased that they have considered our principal and fundamental position that the VRI and each racing code within it should be no worse off as a consequence of the introduction of the new Point of Consumption Tax.
“The VRI has actively engaged with the Government to ensure that the potential risks from the introduction of a Point of Consumption Tax can be mitigated and will not be to the detriment of the future sustainability of Victoria’s racing industry.”
As a new tax on wagering, the Point of Consumption Tax has the potential to increase the burden on WSPs and may subsequently have a negative impact on wagering turnover on all codes of racing and the income they receive from WSPs, including the Victorian TAB Joint Venture between the VRI and Tabcorp.
The VRI is reliant upon the wagering income generated by these WSPs to provide the critical funding required to support the sustainability of the VRI and its stakeholders.
“We look forward to a finalisation of the framework for the Point of Consumption Tax which seeks to ensure that the VRI and each racing code within it are no worse off and that the future sustainability of the VRI is not detrimentally impacted,” Mr Thompson said.
“Given that the impact of a Point of Consumption Tax on the behaviour of customers and WSPs cannot be judged with absolute clarity until after its implementation, we are pleased that the Government has committed to conduct a formal review of its impacts within the first 18 months of operation, along with further future reviews as appropriate.
“The VRI now looks forward to working with the Government on the detailed terms of reference. We will also continue to work with the WSPs to understand the potential implications for them and to ensure their continued support of the VRI and its stakeholders.”
The VRI is a major part of Victoria’s sporting and cultural landscape, and contributes $2.8 billion annually to the Victorian economy while supporting over 140,000 jobs and participants.