Online Gambling Tax Australia

1. Australian Online Gambling Tax
2. Online Gambling Tax Australia Tax
3. Online Gambling Tax Australia Online
4. Online Gambling Tax Australia 2019

In Australia, it is the gambling operators that pay tax, not the players. There are no situations in which Australian players pay any income tax on their winnings. The federal government views this as income from a hobby and the result of luck. The amount of tax the operators pay depends on the type of game. Australia’s federal government has revealed plans for a point-of-consumption tax (POC) on online gambling. Online casino gaming is prohibited in Australia under the Interactive Gambling Act 2001 (Cth) (Interactive Gambling Act). However, a person may still apply for an ‘internet gaming licence’ in the Northern Territory and offer their gaming products outside of Australia in certain circumstances.

He might not be on Australia’s rich list yet, but Tasmanian David Walsh is surely one of Australia’s most interesting high-net worth individuals.

In the last few years, Walsh has poured vast chunks of his fortune into the country’s largest private art museum, Hobart’s Museum of Old and New Art, which has almost immediately become known as Mona since opening in early 2011.

GAMING TAX In South Australia, different tax rates apply to income gained from gaming machines, known as ‘net gambling revenue’ (NGR), depending on whether the gaming venue is a profit organisation (e.g. A hotel) or a non-profit association (e.g. A club or community hotel). The only group that consistently wins money from gambling is those entities that ARE actually in the business of gambling: the casinos, the clubs who own pokies, and the online sport betting companies, and you better believe that THOSE companies get taxed! Being in the business of gambling makes money, and so they pay tax on the money they make.

But unlike the property developers, media barons and miners that dominate Australia’s rich list, Walsh hasn’t made his money through conventional means – he’s a professional punter with what appears to be a brilliant record.

Kudos to The Australian Financial Review for a revealing series of articles on Walsh and his syndicate of punters who based themselves in a Hobart hotel called Waggon & Horses and wagered billions of dollars on racing and the lottery game Keno.

Now, it’s long been the mantra of the Saturday punter that gambling profits are tax free – just as gambling losses cannot be claimed as deductions.

Australian Online Gambling Tax

But Walsh is embroiled in a case with the ATO that could turn that logic on its head.

The case, in the Federal Court, involves the Tax Office trying to hit Walsh with a tax bill for an additional $37.7 million for the 2004-06 financial years, plus interest, due to Walsh’s shareholding in the punters’ syndicate.

While Walsh has always argued these were recreational winnings, the ATO believes the fact that the syndicate set up three companies to provide it with statistical analysis and other services shows this was more than a simple punters’ club.

In a statement to the AFR, Walsh said the punters’ club members were not shareholders of the services companies and reiterated his position on the tax treatment of gambling winnings. It’s worth quoting him at length:

“To begin with, I have always treated the proceeds of my gambling as the ATO told me. Their opinion, sought a number of times, was that gambling winnings aren’t taxable. In fact, to my knowledge, no gambler has ever been assessed as taxable.”

“There have been frequent reviews and audits into my gambling, all of which have found that winnings are not taxable, perhaps in part because no one knows how to treat losses and deductible expenses.”

The last point is a very good one: If the ATO wants to tax winnings, should losses also be deductable? This case could set some very interesting precedents.

Interestingly, Walsh’s winnings would have been taxable in the United States, where wins on bingo, Keno, poker tournaments and some other forms of gambling are reportable and taxable in certain circumstances.

Online Gambling Tax Australia Tax

Australian governments love gambling taxes. Could a case like the ATO vs Walsh change their minds on taxing punting wins?

Online Gambling Tax Australia Online

I’d say not, but it certainly makes this battle one worth watching.

Online Gambling Tax Australia 2019

James Thomson is a former editor of BRW’s Rich 200 and the publisher of SmartCompany and LeadingCompany.