The Betting Tax Amendment (Point of Consumption) Bill which passed through NSW Parliament last week will deliver a vastly fairer financial outcome for greyhound racing than was initially proposed, as a result of strong fair go lobbying by greyhound industry participants.
The Bill will introduce a point of consumption tax (PoCT) at a rate of 10% to apply to the net wagering revenue of all betting operators, derived from NSW activity. The NSW Government expects that PoCT will generate $100m a year in revenue.
The Bill also provides for the equivalent of 2% of all taxable net NSW wagering revenue to be distributed to the three NSW racing codes. This is estimated to be $40m per year.
The NSW Government’s decision to introduce a PoCT was first announced in June as part of the State Budget. At the time, the NSW Government was understood to be favouring a distribution to the codes on the basis of the 1998 Intercode Deed which would see the greyhound industry receive just 13% against a greyhound wagering revenue market share of at least 22%.
Given that PoCT is a new revenue for the Government, derived in net terms from betting operations outside of the NSW TAB, the Intercode percentages were completely unrelated.
A draft Bill was then presented for targeted and confidential stakeholder consultation in September and the NSW GBOTA made a detailed submission. Despite the PoCT industry distribution being a discretionary decision of the NSW Government, the Draft Bill confirmed that the Intercode percentages were to apply to it.
This meant that greyhound racing would receive just $5.2m each year as a result of the PoCT distribution.
NSW GBOTA chairman, Joe Cotroneo, said that the NSW GBOTA submission had strongly opposed the methodology being applied to the industry distribution.
“Our submission sought not only a fair share of the PoCT distribution, but it also reinforced with Government the need for the total NSW racing industry funding model to be reviewed so as to provide a fair go to each code, including greyhound racing, to provide every code with fair prospects for sustainability.
“Our driving point was that the current levels of cross subsidisation from wagering revenue from greyhound racing to the other codes are not sustainable if the NSW greyhound industry is to maintain the costs of best practice regulation, animal welfare and industry governance whilst also improving prizemoney returns to participants and maintaining our regional economic and social contribution.
“We don’t need hand outs, we just need our fair share of what we generate and PoCT distribution had to be seen as a point where the overall racing funding model commenced its change journey.”
The Bill introduced to Parliament on October 17 continued to support the industry allocation being based on Intercode percentages but, in addition to benefits outlined in the draft Bill, it included a special appropriation to the Greyhound Welfare and Integrity Commission of $4m per year until 2022 at which time the appropriation will be reviewed.
NSW Treasurer Dominic Perrotet, said that, in providing the further appropriation to greyhound racing, Government had listened to the feedback received and that the total annual allocation to greyhound racing of $9.2m now represented around 22% to 23% of the total that was now being distributed to the racing codes from PoCT proceeds.
NSW GBOTA chairman, Joe Cotroneo, said that the additional funding was clearly a result of the industry protesting to the Government over the past four months.
“The way in which we are getting paid is complicated, perhaps even messy, but the total now being received is fairer and all of those that have taken time to protest the initial decision of Government should take some satisfaction in that.”
NSW GBOTA Executive Officer, Brenton Scott, said that while the NSW GBOTA remained opposed to any industry revenue being distributed on anything but market share, it was clear the Government and the wider parliamentary system was increasingly committed to greyhound racing receiving fair go funding.
“Whilst the collective effort of the industry was successful in improving considerably the greyhound code distribution that Government initially wanted to provide, it was particularly pleasing that Labor and the Shooters, Fishers and Farmers Party (SFFP) moved amendments in support of improving our outcome even more.
“Ryan Park, Labor’s Shadow Treasurer, and Robert Borsak, for the SFFP, in supporting market share arrangements in both lower and upper house amendments, clearly acknowledged the cost challenges before the industry and the need for it to receive a fair, stable funding arrangement.
“Ultimately, both amendments were unsuccessful but there has never been a higher level of recognition within the NSW Parliament as to the unfairness of our overall funding model and clearly momentum for ongoing change is building.”
The greyhound industry fight for fairness will continue over the next five months as NSW heads to a State election in March 2019.
“We must continue to outline that the overall NSW racing industry funding model is not sustainable and seek commitments for funding reform.
“Four independent reports have concluded the need for greyhound racing to be placed on fair footing and have called for Government intervention in bringing this about.
“The current level of cross code subsidisation, to the detriment of greyhound racing, is now over $30m per year and the parliamentary system has an obligation to hear us and support us.
“The greyhound industry has embraced reform, we are on a pathway that will have best in world regulatory, integrity and animal welfare standards.
“It is only reasonable that we continue to advocate for a fair funding model so that industry participants, those at the forefront of the reform which meets the public interest, receive a fair financial return for their efforts in driving wagering turnover growth.”
See the NSW GBOTA submission responding to the Betting Tax Amendment (Point of Consumption) Draft Bill.