“A missed opportunity” – Wagering industry blasts Queensland POCT call as counter productive

Australia’s biggest wagering company has described the state government response to the McGrath review into Queensland racing as “disappointing”, predicting the greatest impact will be felt by the regional and country clubs it was supposed to assist.

Sportsbet has been campaigning for a reduction to the Point Of Consumption Tax rate in Queensland from its current level of 20 per cent back to 15 per cent.

The Queensland Racing Review, chaired by Matthew McGrath, made that move a key recommendation, but it was one of five aspects of the review that Racing Minister Tim Mander rejected when announcing The Next Lap – A Plan for the future of Queensland racing on Saturday.

Barni Evans, Sportsbet CEO, is not usually drawn in to public comment on industry issues, but was quoted in a statement on Saturday in response to Mander’s launch of his plan for Queensland racing.

“The Government’s response to the Review is disappointing. It does not address the long-term sustainable funding of the industry through tax reform. It represents a significant missed opportunity to reignite investment and secure the future of racing in Queensland,” Evans’ statement said.

“Over the past four years, Racing Queensland’s revenue has significantly trailed the growth in other states.

“The reason is clear: Queensland’s 20 per cent Point of Consumption Tax (POCT), the highest of the major states in the country, is driving investment south. The reality is Queensland cannot compete with New South Wales, Victoria and South Australia with the current tax framework.

“Matt McGrath’s independent Review made it clear that lowering the tax rate to 15 per cent was essential to encourage investment in Queensland racing. That advice has been ignored.”

Sportsbet had become increasingly involved in sponsorship in Queensland in recent years, especially investing in country clubs with deals at Nanango, Bundaberg, Gladstone and Mareeba.

Evans said the decision not to change the POCT rate would be hardest felt in the regions, which the government pinpointed as one of the seven key focus areas of its new plan.

“Lowering the tax rate would unlock investments into Queensland racing, particularly regional clubs. These investments would have delivered long-term sustainability for racing,” he said.

“The consequences will be felt most by the 120 regional and country race clubs, which were set to be the largest beneficiaries. These clubs will continue to rely on Government handouts rather than enjoying the benefits of a thriving, self-sustaining industry.”

The Next Lap Report described country racing as “deeply rooted in Queensland history” and said it would not only benefit from a $200 million Racing Future Fund, but also several other initiatives.

Entain’s public response to the report was less emphatic but did point to other possible impacts of the refusal to change the POCT rate.

“Like every business across Queensland, Entain is dealing with rising operating costs, so we are grateful the Government undertook the racing review and provided an opportunity for all stakeholders to contribute,” a spokesman said.

“We will continue to work constructively with the Government to support a sustainable racing and wagering industry, including protecting Queenslanders from black-market operators who pay no tax and offer no consumer safeguards.”

Other wagering executives spoken to by The Straight, who did not wish to be publicly quoted, pointed out that Queensland was the most expensive state for wagering operators to do business and the review outcome was a case of ‘bad politics getting in the way of good policy’.

Queensland’s POCT rate, which went to 20 per cent in late 2022, is higher than any other state and only trails the ACT, which raised its rate to 25 per cent in 2023.

Industry lobby group Responsible Wagering Australia (RWA) said there was more work to be done to ensure Queensland has a funding model that works for the racing industry.

“While the Review identified the need to reassess the Point of Consumption Tax (POCT) settings, it is unclear why this recommendation was not progressed, and RWA believes with further discussion we could achieve a better long term result for the industry,” CEO Kai Cantwell said.  

“Reducing the current 20 per cent POCT rate remains an important opportunity to strengthen industry funding, support growth and secure long term returns for racing. A model that supports investment and delivers more funding back into racing, not less.” 

“We know there is a tipping point where taxation becomes counterproductive as WSPs have to pull back on customer value with lower odds, and less investment. That reduces wagering activity, shrinks the tax base, and results in less money flowing to racing,”

“We’ve already seen this play out in the ACT and in Queensland, where increases to POCT were followed by reduced wagering activity and falling total tax collected – the exact opposite of what the policy was designed to achieve. 

“None of us want to see that trend continue or worsen in Queensland.”

Cantwell said its goal was to work with the Queensland government so that racing remains strong, competitive and well resourced. 

“This is not just about wagering – it’s about jobs, community racing, regional communities and major infrastructure projects which need guaranteed funding,” he said.

Tabcorp was approached, but did not wish to comment.