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

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.

Advertising’s Role in the Gambling Landscape

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.

Proposed Tax as a Solution

The Australia 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 proposed tax would initially start at 1.4%, increasing to 2%.

• Funds could help offset ad revenue losses for broadcasters.

• Additional revenue could support public media like ABC.

Concerns About Offshore Operators

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. Experts warn that such a ban might not achieve its intended goal of reducing gambling-related harm, as offshore operators—who often evade local regulations—could continue to advertise and attract Australian customers.

• Offshore operators may exploit regulatory gaps.

• A total ban could push consumers toward unregulated platforms.

• Enforcement challenges remain a key issue.

Expert Opinions on Advertising Limits

Julian Hoskins, founder of Senet, a law firm specializing in gaming regulations, 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 believes this should be done through a measured approach rather than a total ban.

Jamie Nettleton, a partner at Addisons Law Firm, emphasized that advertising is essential for licensed betting operators. He noted that the ability to market services is crucial for maintaining a local presence and competing with offshore entities.

• Experts advocate for balanced, targeted ad restrictions.

• Total bans risk harming local, regulated operators.

• Responsible advertising practices are viewed as key.

Comparative Approach: New Zealand’s Example

While Australia debates tougher ad restrictions, New Zealand has taken a different path. Earlier this month, it announced plans to license online casinos for the first time—an effort to minimize harm while ensuring tax collection and consumer protection. Licensed operators will be allowed to advertise under strict conditions but will be prohibited from sponsoring sports teams or venues.

Conclusion:
Australia’s proposed gambling tax highlights a growing tension between curbing gambling-related harm and maintaining a sustainable media and gaming economy. Whether the government adopts a tax, a ban, or a hybrid model, the outcome will significantly shape the future of the nation’s regulated gambling landscape.