The Victorian government has revised its expected revenue from racing and betting taxes downward by $36 million this financial year, as the expected uplift from the rise in the Point Of Consumption Tax (POCT) falls short of expectations.
The half-yearly update from the Allan Labor government was published last Friday and while expected gambling taxes from lotteries, casino and pokies are all set to exceed expectations set out in the budget released in June, racing and betting tax revenues have been revised from $435 million to $399 million.
Racing and sports taxation also includes aspects such as wagering licence fees, but POCT makes up a significant amount of that revenue.
Victoria’s POCT rose to 15 per cent on July 1 this year, up from 10 per cent, with half of those proceeds now passed onto the three codes of the racing industry as part of the funding agreement brokered as a result of the end of the Tabcorp joint venture.
When it first announced the POCT rise in May last year the Victorian government was predicting tax revenues from racing and sports would be $462 million in 2024/25, but that was revised down by $27 million by last May’s budget.
That means that the projected racing and sports tax revenue in the first year of the new POCT regime is now $63 million, or 13.6 per cent, less than what was initially projected.
The reason for that is an ongoing wagering decline which has seen turnover slump and bookie margins increase at the very same time the racing industry has switched to a funding model with a much greater reliance on POCT.
Bren O’Brien
Racing Victoria previously insisted it has done its own planning on expected POCT share based on its own wagering data as a means to ensure it doesn’t get caught short in any decline.
But the nature of the new agreements means racing bodies in all three codes are much more vulnerable to fluctuations in the wagering markets.
The 50 per cent boost in the Point Of Consumption tax will generate $122 million in additional racing and sports betting taxes for the state government in 2024/25 as compared to 2023/24.
While the budget update revised the 2024/25 number down, it is still predicting revenue from racing and sports betting taxes to jump to $447 million in 2025/26, then $456 million in 2026/27 and $466 million in 2027/28. It is not known on what basis these rather bullish projections were made.
Those figures represent only a very slight downward adjustment on the forward estimates published in the May budget.
In the aftermath of the half-year budget update last Friday which revealed an overall deficit blowout from $2.2 billion to $3.6 billion, Treasurer Tim Pallas announced he would be resigning from parliament and retiring from politics.
Aushorse Investor’s Guide 2025
- More Races worth $1 million+ than Europe & America combined
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Racing Victoria has its own deficit challenges, announcing a $11.8 million loss last financial year.
The downturn in wagering continued through the spring carnival and stood at 8.2 per cent up until November 10. Racing Victoria has since reported that Champions Day (Flemington), Caulfield Thousand, Cranbourne Cup Day and Caulfield Spring Finale (Zipping Classic) meetings all delivered increased turnover in what is perhaps a sign of a turnaround in the wagering slump.
Bren O’Brien
