A new report released today by the South Australian Council of Social Services highlights growing pressures on the state budget from declining gambling tax revenues – but it is not necessarily good news for gamblers or the community.
The SACOSS report notes that gambling taxes are the fifth biggest source of state taxes ($388m in 2014-15), but estimates that in real terms gambling tax revenue is now $111 a year less than it was a decade ago.
Pokies are the major form of gambling in South Australia, but expenditure on pokies fell as a result of declining household incomes and the welcome introduction of smoking bans in gaming areas. The fall in expenditure flowed through to a lower tax take.
Tax from lotteries, the casino and the TAB all fell due to changes in government policy.
SACOSS CEO, Ross Womersley says, “Taxing gambling is a complicated issue. Gambling should be taxed in order to pay for the social costs of gambling and to share the windfall profits that gambling provides, but it is a tax that falls most heavily on many low income households and a considerable part of the revenue is based on the misery and losses of problem gamblers."
“So, while it is a good thing that expenditure on pokies has declined in real terms, the subsequent tax shortfall will create budget problems for the state government. And while other gambling taxes have declined, this does not necessarily mean gamblers are losing less – it is just that the new forms of gambling like online betting are harder to tax and decrease the ability of governments everywhere to properly tax gambling.
“This is important because we may be seeing the long term erosion of what has been a significant tax base for the state government. This revenue will need to be found elsewhere or we will see cuts to vital services.
“Our report is designed mainly to highlight the issues, but it also makes recommendations about using differential taxes to encourage gambling harm minimisation measures and calling for point of consumption taxation and increased licence fees for online gambling and sports betting.
“With the traditional gambling tax base in decline and the next gambling wave (sports betting) rising, we believe that the time to set up the gambling tax regime for the future is now!”
To help, SACOSS has produced three fact sheets on gambling tax:
1. Gambling tax: winners and losers;
2. Declining gambling tax revenue; and
3. Sports betting and online gambling.
You can also read the full report: Losing the Jackpot: South Australia’s Gambling Taxes.
For comment or more information, please contact:
SACOSS CEO Ross Womersley: 0418 805 426; or
Tania Baxter SACOSS Communications Officer: 8305 4227 or 0432 902 105