Gambling Operators in Australia Could Be Hit with a 2% Tax Over Proposed Ad Ban

Article by : Erik Gibbs Aug 21, 2024

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Gambling operators in Australia could soon face a new financial burden if the government decides to implement a proposed 2% tax on gambling revenues. This suggestion comes from The Australia Institute, a public policy think tank, as a way to offset potential losses in advertising revenue if a ban on gambling advertising were to be enacted. The debate over gambling ads has been intensifying, with the government considering options like “frequency caps” instead of an outright ban, to limit the number of gambling ads shown during specific times.

Gambling advertising plays a significant role in the Australian media landscape. In the 2022/23 financial year alone, sports betting companies spent approximately AUD239 million (US$156.33 million) on advertisements across free-to-air TV, radio, and online platforms. The concern is that a complete ban on these ads would create a substantial revenue gap for broadcasters, particularly in a highly competitive market.

The Australian Institute proposes that a small tax on gambling revenues, starting at 1.4% and possibly increasing to 2%, could effectively replace the lost advertising income for media companies. This tax could not only compensate for the loss but also provide additional funding to public broadcasters like ABC, which has faced significant budget cuts in recent years.

The proposal is likely to gain traction among anti-gambling advocates, but it doesn’t address the potential impact of a blanket advertising ban on the presence of offshore gaming operators in the Lucky Country. Experts have raised concerns that such a ban might not achieve its intended effect of reducing gambling-related harm, as offshore operators, who often evade local regulations, could continue to advertise and attract Australian customers.

Julian Hoskins, founder of Senet, a law firm specializing in gaming regulations, has expressed skepticism about the effectiveness of prohibition. He argues that similar restrictions in other jurisdictions have failed to curb gambling advertising by offshore operators. Hoskins supports reducing gambling ads, particularly those that target vulnerable populations such as children, but he believes this should be done through a measured approach rather than an outright ban.

Jamie Nettleton, a partner at Addisons Law Firm, emphasized the importance of advertising for licensed betting operators. He pointed out that the ability to market their services is a critical component of their business model, allowing them to maintain a presence in the local market.

While Australia is considering further limiting gambling advertisements, neighboring New Zealand has taken a different approach. Earlier this month, New Zealand announced plans to license online casinos for the first time, a move aimed at minimizing harm while ensuring tax collection and consumer protection. Licensed operators in New Zealand will be allowed to advertise under strict conditions but will be prohibited from sponsoring sports teams or venues.