South Australia has become the latest state government to revise its budget projection for wagering tax revenue, with an expected shortfall of $3 million in the current financial year.

South Australian racing
South Australia estimates a budget shortfall of $3 million in the current financial year from wagering tax revenue. (Photo: Racing SA)

The South Australian budget was handed down on Thursday with no specific additional funding allocation for racing.

Last year’s budget contained a $27.8 million provision for the industry over four years off the back of increased returns from the Betting Operations Tax, South Australia’s term for the Point Of Consumption Tax introduced in 2017 and currently set at 15 per cent.

That additional funding was made possible when greater compliance measures saw revenue from the BOT exceed initial budget expectations by $31 million through 2022/23.

The bonus from a tax compliance crackdown was always expected to be a one-off, and overall, BOT was expected to drop by $19 million in 2023/24.

However, in line with what other states have seen, due to the decline in wagering the 2023/24 BOT revenue is estimated to be $60 million, $3 million short of what was projected heading into the financial year.

This compounds through the forward estimates, with the SA Treasury now predicting revenue from BOT will by $61 million in 2024/25, $4 million lower than was forecast in last year’s budget.  BOT revenue is projected to be $63 million in 2025/26, $65 million in 2026/27 and $67 million in 2027/28.

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The difference in net position compared to the previous budget across this and the next three financial years in terms of projected Betting Operations Tax revenue is $15 million.

“Over the four years to 2027-28, growth in gambling tax revenue is forecast to average 1.8 per cent per annum. This mainly reflects an expectation that growth in gaming tax revenue will return to more modest levels over the forward estimates period,” the budget statement read.

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BOT revenue makes up only 10 per cent of overall gambling revenue in South Australia, with gaming machines contributing over two-thirds, or $420 million, to state coffers. Lotteries contributed $111 million, nearly twice as much as BOT.  

The current four-year funding model sees 20 per cent of SA’s BOT revenue flow through to the thoroughbred, harness and greyhound industries.

What the revised budget projections indicate is that those three codes will be materially $3 million worse off over the next four years.