A Point of Consumption Tax (PoCT) was introduced in the state in January 2019 and applies to the net wagering revenue derived from all wagering and betting activity by customers in Victoria. A single eight per cent tax rate will now apply to all bet types. Te PoCT will apply to operators whose annual net wagering revenue exceeds a $1m tax free threshold.
Te Victoria Commission for Gambling and Liquor Regulation (VCGLR) is the authority which regulates the state’s gambling and liquor industries. It operates under the Gambling Regulation Act 2003 (which was amended in 2017), the Casino Control Act 1991, the Casino Management Agreement Act of 1993 and the Racing Act of 1958.
l Lottery - operated by Tatts it is known as
Tattslotto and has been in existence since 1972. Previously (since 2008) Intralot had a licence to operate scratchcards but pulled its Keno and scratchcard business in 2014 transferring the licence to the Tatts Group. Meanwhile there are some 620 keno outlets.
l Betting - the VCGLR oversees some 740
wagering and betting agents. Wagering and betting has been provided by TabCorp since 2012 to conduct on-course and off-course wagering and betting on racing, sports and other approved events. TAB operates some 639 licensed venues and 92 retail agencies plus there are 182 registered sole trader bookmakers, 45 bookmaking partnerships and four bookmaking companies in Victoria.
Victoria is considered the home of racing in Australia with such international races like the Melbourne Cup. Te governing bodies are Racing Victoria (thoroughbred racing), Harness Racing Victoria and Greyhound Racing Victoria.
Racing Victoria Limited was established in 2001 and holds around 550 races annually and the principal club is Victoria Racing Club at Flemington. Te Victorian Racing Industry (VRI) generates around $2.8bn annually for the Victorian economy. TabCorp began a 50/50 joint venture with the VRI in 2012.
Tere are some 67 thoroughbred racing tracks and around 1.3 billion attendances. Total revenue was $424m last year whilst total wagering amounted to $6.39bn. Pari-mutuel betting accounts for 30 per cent of all domestic Victorian thoroughbred racing turnover.
Wagering tax in 2017 amounted to $54.1m (3.3 per cent of all gambling tax revenue in Victoria) which is paid into hospital and charity funds.
A Point of Consumption Tax (PoCT) was introduced in the state in January 2019 and applies to the net wagering revenue derived from all wagering and betting activity by customers in Victoria. A single eight per cent tax rate will now apply to all bet types. Te PoCT will apply to operators whose annual net wagering revenue exceeds a $1m tax free threshold.
Tis could have a negative impact on profits although the government aims to review this tax after 18 months.
Meanwhile Victoria is being urged to consider a revamp of its wagering industry to permit more than one company to operate retail betting shops. Led by Paddy Power Betfair the company argues that competition leads to greater consumer choice and product innovation.
At the moment only TabCorp holds the Victorian government’s 12 year wagering licence and is permitted to run pari-mutuel and fixed odds betting and off-course retail betting across the state via TAB shops and pub terminals. Te company has the exclusive licence to run retail betting in all states except Western Australia.
Paddy Power Betfair has expressed an interest in bidding for the Victorian wagering licence up for renewal in 2024.
l EGMs - With a Labour win in the November
2018 Victoria elections, the state legislated a new 20 year licensing deal to come into effect in 2022 despite resistance from the opposing Green party who are keen to scrap pokie machines completely.
However the machines, first introduced into the state in 1991 under the Labour government, added around $1.1bn to state coffers last year and are a key source of revenue.
Tere is a capped number of 30,000 EGMs across 500 or so gaming venues. Of the 30,000 there are some 2,628 allocated to the Melbourne Casino whilst the remaining 27,372 are allocated to clubs and hotels (with a 50:50 split approximately).
Te regional caps were first introduced in 2001 and there are currently 25 purpose defined regions with specific caps whilst municipal limits were introduced in 2009 and cover almost all municipal areas in the state at a ratio of 10 gaming machines per 1,000 adults.
Meanwhile clubs cannot hold more than 840 club gaming machine entitlements and no single approved venue can have more than 105 entitlements, whilst no operator or organisation
can have an interest in more than 35 per cent of hotel gaming machine entitlements.
Amendments have been made to the Gambling Regulation Act in 2017 and will apply from 2022. Te reforms include:
• Replacing the current 10 year term with a 20 year licensing term and requiring operators to make two payments – the first in 2022 and another in 2032.
• Giving venue operators the chance to acquire post 2022 entitlements up to the number of entitlements they held in July 2017 through an administrative allocation process (not competitive).
• Increasing the maximum number of entitlements held by club venue operator from 420 to 840.
• Adjusting the 50:50 rule to facilitate the allocation of unused club entitlements to the hotel sector.
• Making changes to the taxation system by replacing the current three tax brackets with four brackets with a higher rate applying to the top bracket.
Meanwhile Intralot Australia (IGS) has the single EGM monitoring licence for providing the state with the remote monitoring and the YourPLay system that controls the VLTs across the hotels and clubs in Victoria.
l Casino - Crown Melbourne Ltd was opened in
1997 and is Australia’s largest casino with three hotels, function rooms, 70 restaurants and some 40 retail outlets and entertainment facilities. Te licence runs until 2050 and it is permitted to operate 2,628 EGMs and 540 table games.
Te casino resort currently has three hotels – Crown Towers with 481 rooms, Crown Metropol with 658 rooms and Crown Promenade with 465 rooms.
Crown Melbourne is located at Southbank and is one of three casinos in Australia operated by Crown Resorts, the other two being Crown Perth and the soon to open Crown Sydney in Barangaroo. Te Crown Melbourne Casino saw revenues of $2.27bn and EBITDA was $645m.
Crown, and its joint venture partner Schiavello Group, were granted planning permission in 2017 to construct the proposed One Queensbridge project which will include a fourth hotel project -a 388 room six star hotel with 700 luxury apartments which would be connected to Crown Melbourne via a sculptured pedestrianised bridge.
Te project is worth around $1.8bn but there are problems with funding arrangements. Crown Resorts’ request in March to delay the start of development was turned down and the company is now looking at options for the skyscraper.
Meanwhile the sixth casino review was completed last year concluding that Crown Melbourne remains a suitable operator for the casino licence.
NEWSWIRE / INTERACTIVE / MARKET DATA P169
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