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Australia’s Northern Territory government has announced major tax increases for online wagering and matched lottery operators in its annual budget strategy, prompting a gambling industry outcry over the surprise move.
The conservative Country Liberal Party government’s first budget policy and forecast paper for 2025/2026 was released on Tuesday (May 13) amid a worsening debt profile that ranks the 255,000-person jurisdiction as the most indebted in Australia per capita.
With overall tax revenue set to fall slightly, the government has moved against the gambling industry to salvage that balance.
The Treasury will ramp taxes on corporate bookmakers and online matched lottery operations, doubling the former group’s annual tax cap to 2m revenue units, or A$2.9m ($1.9m) as of July 1 this year, while approximately doubling the latter group’s tax rate to a minimum 50 percent.
The doubling of the tax cap amounts to an instant doubling of the gambling tax for the territory’s largest gambling companies and a significant tax increase for other licensees.
Jamie Nettleton, a Sydney-based partner with the Addisons law firm and a gambling law specialist, said the lack of notice on the tax hikes raises “question marks on the integrity of the jurisdiction.
“If they’re going to increase taxes without consultation, how reliable are they?” he told Vixio GamblingCompliance on Wednesday.
“If that’s the way you treat your licensee, how can you engender trust?”
The Northern Territory is the licensing home of about half of all of Australia’s corporate bookmakers offering online sports betting and racing products. These licensees include the Australian arms of several global gambling giants such as Flutter, Ladbrokes and Betfair.
The budget forecast predicts that the doubling of the tax cap for the “bookmaker tax” on online sports betting and racing operators will lift revenue from almost A$20m in the current financial year to about A$33m next year and increase slightly in the following years.
Meanwhile, the doubling of the tax rate for matched lotteries and other products under the less lucrative “casino/internet tax” category is expected to balloon government revenue from A$7m to A$25m.
The net effect of the changes will see overall gambling tax revenue rise from A$115m this year to A$145m next year, with gambling’s share of the Northern Territory’s (NT) total tax take rising from 10.5 percent to 13.3 percent.
Corporate bookmaker lobby group Responsible Wagering Australia (RWA) responded later Tuesday, lamenting that “short-term revenue grabs” are endangering jobs and investor confidence.
The budget policy is “economically reckless and risks undermining the Territory’s reputation as a stable and competitive licensing jurisdiction”, it said in a statement.
RWA accused the government of releasing the budget without consultation and pre-empting the results of the government’s Racing Industry Review, which the lobby group said was “explicitly commissioned to inform long-term sustainability settings for the wagering and racing sectors”.
RWA chief executive officer Kai Cantwell said the government had “blindsided” wagering service providers and undermined the review process, and he called on officials to reconsider.
“The NT Government was elected on a platform of driving economic growth, delivering a competitive tax and investment environment and attracting private investment … yet this policy decision directly contradicts that commitment and risks undermining investor confidence in the Territory,” Cantwell said.
“It sends a message that consultation, process and industry sustainability have taken a back seat to short-term revenue grabs.”
Meanwhile, Nettleton said the larger companies will bear the brunt of the changes, but smaller bookmakers could suffer material impacts on their operations.
“Obviously their tax burden would have increased quite substantially.”
At the same time, Nettleton said there is no “active option at the moment” for licensees seeking greener pastures in Australia’s states, given the hub status and beneficial regulatory elements of the Northern Territory.
“There isn’t really a framework that exists anywhere else either on the face of the law or from a practical perspective,” he said.
Nettleton added that a secondary watch point will be the responses of Australia’s six state governments to the tax hikes, and whether the Northern Territory’s shift will serve as a new trigger for the states to inflate their point of consumption tax rates.
