The ACT government has denied wanting to eliminate sports betting in the capital and increasing its betting operations tax simply to increase revenue.
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The increase from 20 to 25 per cent not only made it the highest point-of-consumption tax in Australia, but also raised concerns the government was trying to shut down the racing and wagering industries "by stealth".
But the government has denied those suggestions. The ACT Greens have repeatedly tried to shut down the racing industry.
"The ACT government does not have a policy to phase out sports betting in the ACT," a spokesperson for ACT Gaming Minister Shane Rattenbury said.
"Any increase in taxes is not aimed at phasing out sports betting."
The 5 per cent jump was expected to raise an extra $10 million for the government's coffers annually, taking the total brought in by the PoC tax to $32 million per annum.
In other states, a percentage of the PoC tax was used to fund the racing industry, with up to 80 per cent directed to the sport.
But that's not the case in the ACT where all the tax simply goes into general revenue.
There's already been a backlash from Australia's largest online betting agency, Sportsbet, who have responded by cancelling their popular "Bet With Mates" promotion and bonus bets for everyone living in the ACT.
While they're the only company to have taken action so far, other betting agencies were monitoring the situation and have not ruled out following suit.
That could lead to an unintended result of the government's tax hike, where PoC revenue actually drops, despite the increase.
The government said it had not undertaken economic modelling on the outcome of Sportsbet's decision.
Sportsbet and other betting agencies were caught off-guard by the tax hike, which had been made without consultation of the industry and simply released as part of the ACT budget.
"The 2023-24 ACT budget included a package of carefully sequenced measures to meet the growing needs of our city," a spokesperson said.
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"Revenue gained as part of this tax increase will form part of the territory's consolidated revenue to be spent on priority initiatives that benefit the whole of the Canberra community.
"The territory's consolidated revenue funds essential services for our city such as roads, libraries, parks and gardens; rubbish collection; schools, hospitals and community health; policing, emergency services and the justice system; disability and community services; and environmental regulation."
The government said any further increases of the PoC tax would be decided in budget planning.
It's believed the wagering industry felt a PoC tax of about 15 per cent was more acceptable.
"Any such decisions are subject to future budget discussions," the spokesperson said.
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