Gambling Taxes

Taxes on gambling are a major contributor to state and territory revenues and, in many cases, are allocated to healthcare, community support and gambling harm minimisation initiatives. In the case of wagering, an allocation of tax receipts is typically directed to the racing industry to support operations. 

The rate of gambling taxes differs depending on the product, the licence it is offered under and the jurisdiction in which the product is offered. Generally, lotteries are subject to relatively high state and territory taxation rates. For example, in the state of Victoria, the rates are 79.4% of player loss where GST is payable, and 90% of player loss where GST is not payable. By contrast, taxes on wagering (including sports bookmaking) are largely levied on a ‘point of consumption’ basis at rates ranging from 15% to 25%.  

Point of consumption taxes on wagering 

Taxes on wagering differ between jurisdictions and by product type. All states and territories other than the Northern Territory have introduced a ‘point of consumption tax’ (POCT) in respect of bets placed by their residents (which is payable by the retail wagering licensee, corporate bookmakers and any other relevant betting operator licensed in Australia, irrespective of the location of the relevant entity accepting the bet). 

This is a departure from the previous 'point of supply' regime, under which states and territories derived no betting tax revenue from corporate bookmakers and other licensed betting operators taking bets online in the relevant jurisdiction. POCT rates vary between 15% of 'net wagering revenue' or some other similar revenue base, to 25% of ‘net wagering revenue’.  

Sports bookmaking and betting exchange licence holders in the Northern Territory also pay a tax to the Territory, levied at 5% of the total amount of wagers made, minus the total amount paid out to those who placed the wagers (subject to a cap of $1,410,000). As of 1 July 2024, a levy must also be paid into a Racing and Wagering Fund, which is applied to various uses, including costs of regulating the industry and efforts towards gambling harm minimisation and responses. 

Lotteries

Lotteries are subject to relatively high state and territory taxation rates. For example, in the states of Victoria, New South Wales and Queensland, respectively, the rates are: 

•  79.4% of player loss where GST is payable, and 90% of player loss where GST is not payable; 

• 76.918% of player loss (player subscriptions net of prize liability) less GST payable on subscriptions and sales commissions: and  

• 73.48% of monthly gross revenue for declared lotteries (with lower rates for instant scratch-its and soccer pools).  

By contrast, taxation of keno across the same three key states is: 

•  24.24% of player loss; 

• 8.91% of player loss (increasing to 14.91% where player loss exceeds A$86.5 million); and  

• 29.4% of monthly gross revenue after deducting any casino commissions 

The various states also set minimum player returns. 

Gaming machines

State and territory taxes on gaming machine revenue are complicated and vary significantly. By way of example, in Victoria, where the average revenue per gaming machine is greater than A$12,500 per month, the tax rate is 60.67% for hotels.  

Electronic gaming machine (EGM) revenues of registered clubs (which are not-for-profit, community organisations) are taxed at a lower rate than hotels. In Victoria, for example, clubs would be eligible for a 4.33% tax concession based on the example above. 

Federal Goods and Services Tax

There is also a federal goods and services tax of 10% payable on net revenue from gambling products; however, state and territory taxation rates sometimes take this into account, and it is offset against taxation payable to state and territory governments.