Increased funding for Victorian Racing.

[Chief Stipe]

POC Tax to increase in Victoria

www.racing.com

A significant reshaping of how racing is funded has been announced.

Victoria's Point of Consumption Tax (POCT) is set to be increased from 10 per cent to 15 per cent - with racing set to receive 7.5 per cent of tax receipts.

No details were released in terms of what the 7.5 per cent of tax will generate in income for Racing Victoria.

The State Government will also scrap a key element of the upcoming wagering licence - racing's key funding source - with the removal of the 'no less favourable' provision, which essentially guaranteed each deal would provide racing with funding certainty.

Racing insiders had been concerned that the new deal could see a significant shortfall in funding, as expressions in the new licence were believed to have been short of the current value.

No details of the new wagering deal were announced on Tuesday.

Both the Government and RV say the announcement is a crucial step in securing racing's long-term future in Victoria.

Racing.com understands key elements of the announcement were finalised in state Cabinet on Monday.

"These changes provide vital long-term certainty for the industry and ensure that it continues to be funded from wagering generated on its product - helping the industry to back jobs and events that bring in millions of dollars each year to communities right across the state," Minister for Racing Anthony Carbines said.

"This latest increase to the point of consumption tax strikes the right balance and brings us into line with other states and provides long-term certainty for Victoria's vibrant racing industry."

This increase will bring Victoria's POCT into line with New South Wales, Western Australia, South Australia and Tasmania at 15 per cent, while Queensland stands at 20 per cent.

In a joint statement, the Victorian Racing Industry said it 'welcomes' the proposed changes to the POCT.

The change will come into play from July 1, 2024.

"We welcome the Victorian Government's plan to provide the VRI with an increased share of POCT receipts from July 2024. This is money that we help generate coming back to the VRI to secure its sustainability and provide funding certainty into the future," RV Chairman Brian Kruger said.

"The VRI supports over 35,000 Victorian jobs and delivers more than $4.7 billion in economic activity annually to Victoria. We are a major Victorian industry, one that not only delivers jobs, but provides entertainment and enjoyment to so many people.

"With the State Wagering and Betting Licence due for renewal in August 2024, and the end of the historical joint-venture industry funding arrangements, it is critical for Victorian thoroughbred racing and the broader VRI that we have long-term certainty around industry funding.

"Funding certainty helps drive important decisions around investments in events, programs and infrastructure right across the state. It drives jobs and helps maintain vital commitments to protect the safety and welfare of animals and participants.

"Victoria is the pre-eminent racing jurisdiction in Australia and we want to keep it that way by maintaining our globally recognised events and ensuring we offer an attractive racing program to drive investment in Victoria."

[Chief Stipe]

 

 

Victorian government to take 15c of every $1 bet on racing

 

 

The Victorian Government has offset a wagering tax hike by doubling the return to the Victorian racing industry.

Thoroughbred, harness and greyhound racings' share of tax receipts will jump from 3.5 to 7.5 per cent with the proposed point of consumption tax (POCT) increase from 10 to 15 per cent.

It means the Victorian Government will now take 15 cents of every dollar bet on the three codes of racing by people located in Victoria.

The POCT arrangement, if passed, will align Victoria with other Australian states, except Queensland, which increased the gambling levy on residents from 15 to 20 per cent last year.

Wagering funds Victorian racing and ensures the codes are competitive in the national prizemoney arms race, particularly with NSW.

The State Government must secure the Opposition's support to pass the POCT legislation.

The POCT last increased from eight per cent to 10 in 2021.

The increased POCT and pass through boost, worth about an extra $100m a year to the three racing codes, will clear a path for the State Government to negotiate the next Victorian wagering licence renewal.

Racing Victoria chairman Brian Kruger said: "We welcome the Victorian Government's plan to provide the VRI with an increased share of POCT receipts from July 2024. This is money that we help generate coming back to the VRI to secure its sustainability and provide funding certainty into the future.

"The VRI supports over 35,000 Victorian jobs and delivers more than $4.7 billion in economic activity annually to Victoria. We are a major Victorian industry, one that not only delivers jobs, but provides entertainment and enjoyment to so many people."

Tabcorp's current deal expires in August 2024.

A Credit Suisse financial report last December speculated Tabcorp would be expected to pay $500m for a new 20-year licence, based on a 20 per cent POCT.

Tabcorp has previously indicated it would not bid huge amounts for the Victorian licence, as current model is the least profitable compared to wagering deals in other states.

The bookmaker, first granted the Victorian licence in 1994, won a 12-year extension in 2012 with an upfront $410m payment to exclusively operate retail betting outlets and TABs in pubs and clubs.

The rise and success of corporate bookmakers, including racing and sports betting heavyweights Entain, the owner of Ladbrokes, and Sportsbet, could result in a restructured landscape.

Tabcorp and the Victorian Racing Industry are in a 50-50 joint venture currently.

Victorian racing generates $4.3 billion to the state's economy and sustains more than 33,000 full-time equivalent jobs, among the 121,000 participants.

The racing codes were united on Tuesday welcoming the State Government POCT proposal.

 

[Doomed]

Perhaps it might be time for NZ to become part of Australia, even even more radically, perhaps the NI could become part of NSW and the SI part of Victoria.

Interesting that the public announcement is all about providing jobs etc state wide. In NZ it is about providing jobs in ChCh, Auck and the Waikato. Previously I would have included Wgtn as well, but I think most racing employment there is heading to Cambridge.

Quite a different approach to things in the two countries. The Aussie approach does seem to be working slightly better at the moment.

[Chief Stipe]

2 hours ago, Doomed said:

Perhaps it might be time for NZ to become part of Australia, even even more radically, perhaps the NI could become part of NSW and the SI part of Victoria.

Interesting that the public announcement is all about providing jobs etc state wide. In NZ it is about providing jobs in ChCh, Auck and the Waikato. Previously I would have included Wgtn as well, but I think most racing employment there is heading to Cambridge.

Quite a different approach to things in the two countries. The Aussie approach does seem to be working slightly better at the moment.

What is interesting is the comments about the licenses to operate coming up for renewal.  TABCORP could be up for $500m to get a 20 yr renewal.  I hope the hell NZ aren't giving their's away.  Strategically Entain would have a cheap backdoor entry into the Australasian market.  I'm not sure the brains trust at TABNZ and NZTR can see this.

[Doomed]

1 hour ago, Chief Stipe said:

What is interesting is the comments about the licenses to operate coming up for renewal.  TABCORP could be up for $500m to get a 20 yr renewal.  I hope the hell NZ aren't giving there's away.  Strategically Entain would have a cheap backdoor entry into the Australasian market.  I'm not sure the brains trust at TABNZ and NZTR can see this.

It is probably much the same as the women's soccer. FIFA is complaining broadcasters don't want to pay as much for the rights as men's soccer. Perhaps bookmakers don't value NZ Racing as highly as Victorian Racing.

[Chief Stipe]

1 hour ago, Doomed said:

Perhaps bookmakers don't value NZ Racing as highly as Victorian Racing.

I think you are missing my point.  Is Entain looking to TABNZ to get a cheap soft entry into the Australian/NZ market?  Licenses to operate in OZ are not cheap.

[curious]

Imagine if the NZTAB had to pay tax of 15% of every dollar bet to the government and taxpayer. The latter may then be more interested in giving something back to racing.

Edited May 3, 2023 by curious

[Chief Stipe]

1 hour ago, curious said:

Imagine if the NZTAB had to pay tax of 15% of every dollar bet to the government and taxpayer. The latter may then be more interested in giving something back to racing.

Yes but the industry will not suggest that and will still try and go back for another bailout.

[Special Agent]

15 hours ago, Chief Stipe said:

Yes but the industry will not suggest that and will still try and go back for another bailout.

There are some good points in here.

Doomed's idea for the north island to join NSW and south island to join Victoria is a little radical but you can see how beneficial it would be for New Zealand.  Would those states want NZ?  I doubt it.

The backdoor entry for Entain looks obvious but, not to our administrators.  That says it all.

15% from every dollar wagered would make a positive difference to racing.  Who in the industry do you think should be suggesting this, and be listened to?

[Chief Stipe]

I just can't believe that with the paucity of information published that there are actually stakeholders in the industry saying that the Entain deal is a good thing.  Deja vu, Groundhog Day - call it what you will but seems to be same old same old to me.

Big promises of lots of increases in stakes.   Haven't we all heard that before?

Even if there is a windfall of extra dosh how much of it will be spent on the fundamental problems the industry faces or will it mistakenly be plowed into stake increases on the assumption that that is the cure all.  Don't we have enough data from the recent and distant past that that approach just doesn't work.

[Special Agent]

100% agree.  Quite obviously people do not learn from past mistakes and  misinformation.  Is it because they are too lazy to read?

[Freda]

20 hours ago, curious said:

Imagine if the NZTAB had to pay tax of 15% of every dollar bet to the government and taxpayer. The latter may then be more interested in giving something back to racing.

The above-quoted 15% figure is the proposed PoCt tax take in Victoria of which 7.5 % is to be returned to racing.  Or that is my understanding, at least. 

 We have a PoCt as well, what is that figure, can anyone tell me?

[Chief Stipe]

20 minutes ago, Freda said:

The above-quoted 15% figure is the proposed PoCt tax take in Victoria of which 7.5 % is to be returned to racing.  Or that is my understanding, at least. 

 We have a PoCt as well, what is that figure, can anyone tell me?

You may be referring to the POCC created in the new Racing Act.  It only applies to offshore bets taken by an offshore operator on NZ Events.  10% of Gross Betting Revenue.   

Basically difficult to administer and an attempt to further enshrine the TABNZ monopoly.

2.5% goes to the Govt Department managing problem gambling.

5% goes to the RIB and Sports and Recreation NZ to be spent on on integrity and betting risk management.

The rest 2.5% is distributed to the racing codes and sports based on the percentage each has contributed to the charges received.

Arguably it was a concession by the industry to get the handouts and more of a monopoly.

[Special Agent]

Don't be fooled with that problem gambling marlarkey.  The figures quoted are always exaggerated and I'd say a good chunk of that 2.5% is spent on wages.  Much like the 1% animal welfare taken out of all stakes doesn't go to the people who rehome the horses but, that is another story.

[Chief Stipe]

17 minutes ago, Chief Stipe said:

Arguably it was a concession by the industry to get the handouts and more of a monopoly.

I should have said the bailout from insolvency.

 

[curious]

7 hours ago, Freda said:

The above-quoted 15% figure is the proposed PoCt tax take in Victoria of which 7.5 % is to be returned to racing.  Or that is my understanding, at least. 

 We have a PoCt as well, what is that figure, can anyone tell me?

The Victorian POCT is:

Point of Consumption Tax

The POCT will apply at a rate of 8 per cent of the net wagering revenue derived from all wagering and betting activity by customers located in Victoria.

 

The NZ POCT is a different bird.

The POCC applies to bets taken by offshore betting providers on racing and sporting events from persons resident in New Zealand

 

The NZ tax is set at 10 per cent of an offshore operators Gross Betting Revenue (GBR)