Betting tax

Australian betting operators who conduct betting operations in Western Australia may be required to pay betting tax.

Betting tax applies to a bet placed with an operator by a person located in WA at the time that the bet was made or by a body corporate whose principal place of business is located in WA.

Betting operators are responsible for determining where bets have been placed in Australia based on the location of the person or the body corporate placing the bet at the time it is placed.

  • Before accepting a bet, a betting operator must take all reasonable steps to identify the customer’s location.
  • If the customer’s location is unable to be determined, the customer’s residential address may be used as their location.

If you conduct betting operations in the Indian Ocean Territories, you may also be liable for betting tax. See details of the arrangement between Western Australia and the Commonwealth.

You must pay betting tax once your WA taxable betting revenue exceeds the threshold of $150,000 per assessment year. Betting tax is calculated at 15% on taxable betting revenue that exceeds the threshold.

All records relating to betting tax must be retained in Australia for at least five years from the date of the bet.

Register

Apply to register within 7 days after the end of the month that you exceed the threshold.

Lodge a return

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Lodge and pay your monthly returns using Revenue Online by the 28th day of the following month to which the return relates. For example, the June return is due on 28 July.

Before lodging a return, you must agree to the Online Betting Tax terms and conditions of use.

Lodge a return even if you didn't receive any betting revenue during the month.

If you don't lodge a return and pay betting tax by the due date, we may apply penalty tax for late or non-lodgment or for late payment.

Returns for the assessment period are finalised through the annual reconciliation process. A credit adjustment may occur if the betting tax paid throughout the assessment period exceeds that required to be paid based on the taxable betting revenue for that period.

See information about lodging an objection if you disagree with a decision made by the Commissioner.

Betting revenue

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Taxable betting revenue must be reported for each monthly return period. This is generally calculated by subtracting eligible payments relating to betting activity in WA from the betting revenue earned for that return period.

Betting revenue for a return period is the total of the following amounts received by an operator:

  • all fees and commissions earned from WA betting exchange and WA pooled bets
  • WA general bets
  • retained unclaimed winnings in relation to WA bets
  • any other amounts a betting operator became entitled to receive during the period as consideration for, or in relation to, WA bets and
  • any other amount that is prescribed.

A free bet is treated in the same manner as any other bet.

Eligible payments

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Eligible payments are made by a betting operator to its customers. These are deducted from the operator’s betting revenue to determine the taxable betting revenue.

For general bets, all amounts paid to customers are eligible payments.

For pooled bets, eligible payments are:

  • contributions by the operator into a pool of pooled bets to increase distributions to customers and
  • any amounts paid directly to customers in excess of the dividends, prizes or winnings they are entitled to from the pool.

The following payments are not eligible payments:

  • non-cash rewards
  • payments made for general business expenses
  • discretionary payments made to customers which they are not legally entitled to
  • payments made as part of an arrangement to attract and encourage customers to place other unrelated bets and
  • contributions to a pool of pooled bets in lieu of free bets.

There are no eligible payments for a betting exchange as a betting exchange does not accept bets or pay winnings from its own funds.

Calculation examples

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Betting tax liability is calculated for each return period using the taxable betting revenue year to date figure, less the threshold amount of $150,000, multiplied by the tax rate of 15%.

Betting Tax Payable YTD = (Taxable Betting Revenue YTD – Threshold Amount) X 15%

Example 1

  Taxable Betting Revenue - Current Period Taxable Betting Revenue YTD

Betting Tax Payable YTD
(Taxable Betting Revenue YTD – $150,000) X 15%

Betting Tax Payable - Current Period
July $400,000 $400,000 $37,500 $37,500
August $200,000 $600,000 $67,500 $30,000
($67,500 - $37,500)
September -$100,000 $500,000 $52,500 0
October $40,000 $540,000 $58,500 0
November $30,000 $570,000 $63,000 0
December $300,000 $870,000 $108,000 $40,500
($108,000 - ($37,500 + $30,000))
  • For July and August, a profit was earned from betting operations. 
  • The betting tax payable in August is reduced by the credit for the July liability.
  • For September, a loss was incurred and a nil amount is payable. Although the taxable betting revenue and betting tax payable is reduced, a refund will not be provided until the annual reconciliation is completed.
  • For October and November, a profit was earned. As each return is reconciled according to the betting tax payable YTD amount, the betting tax payable YTD amount for October and November remain below the amount in August of $67,500, indicating that tax has been overpaid. Therefore nil amount payable is applied to October and November.
  • For December, a profit was earned.

Based on the taxable betting revenue YTD of $870,000, the betting tax liability is $108,000 (($870,000 - $150,000) x 15%).

The monthly betting tax payable is $40,500 ($108,000 – (July $37,500 + August $30,000)).

Example 2

  Taxable Betting Revenue - Current Period Taxable Betting Revenue YTD Betting Tax Payable YTD
(Taxable Betting Revenue YTD – $150,000) X 15%
Betting Tax Payable - Current Period
January $300,000 $300,000 $22,500 $22,500
February $200,000 $500,000 $52,500 $30,000
($52,500 - $22,500)
March $100,000 $600,000 $67,500 $15,000
($67,500 - $52,500)
April $40,000 $640,000 $73,500 $6,000
($73,500 - $67,500)
May -$40,000 $600,000 $67,500 0
June -$100,000 $500,000 $52,500 0
($52,500 - ($22,500 + $30,000 + $15,000 + $6,000))
  • For January, February, March and April, a profit was earned from betting operations.
  • For May and June, a loss was incurred and a nil amount is payable for each month. Although the taxable betting revenue and betting tax payable is reduced, a refund will not be provided until the annual reconciliation is completed.

The liability is calculated at annual reconciliation as

(Total Betting Revenue Assessment Period – Threshold Amount) x 15% – Betting Tax Raised
= ($500,000 - $150,000) X 15% – $73,500 (January $22,500 + February $30,000 + March $15,000 + April $6,000)
= $52,500 - $73,500 = $21,000 Refund

Video overview

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Page reviewed 20 April 2020
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