New tax levies set out in next year’s Northern Territory Government budget will stifle sector investments, wagering advocates have cautioned.
Announced this week, Australia’s Northern Territory Government (NTG) Budget 25/26 envisions a doubling in the betting exchange tax cap that will come into force starting this July.
In its breakdown of the budget, the government forecasted that the betting exchange tax revenue will go up from AU$1.4m (£681k) in 2024-25 to AU$2.9m in 2025-26 as a result of the tax hike.
This will continue to rise by the end of the decade, with policymakers estimating approximate revenues from the betting exchange tax to reach an average of AU$3.2m per annum by 2028-29.
The bookmaker tax cap will also go through a two-fold increase after failing to meet the region’s 2024-25 fiscal outlook, landing at AU$19.8m – or AU$2.6m short of initial targets.
With the rollout of the double tax rates, NTG expects bookmaker tax revenue to quickly climb to AU$32.6m for 2025-26, then moving on to average around AU$33.6mn per annum.
Internet gaming is set to be most affected by the new tax regime. NTG is revising its Gaming Control Act 1993 to set a minimum 50% tax rate for all gambling-related activities conducted under an online gaming licence – again effective from 1 July.
This in turn will drastically increase the tax collected from the segment, bringing it up from AU$7.2m in 2024-25 to an estimated average of AU$24.9m from 2025-26 onwards – or AU$17.7m more collected as tax revenue.
The budget itself is part of the newly-elected Country Liberal Party’s (CLP) AU$10bn revenue plan to offset the previous Labor Government’s politics that came close to breaking its self-imposed AU$15bn debt ceiling.
Treasurer Bill Yan said that the measures, including the gambling tax hikes, will help the NTG stabilise the economy and reduce its reliance on Canberra.
“This is a Budget of action, certainty and security,” the Treasurer remarked. “We inherited deep deficits, record debt, unfunded infrastructure programs and cost blowouts. But instead of punishing Territorians for Labor’s failures, we’re restoring discipline and delivering a clear plan for growth.”
Undermining investor security?
The sector however seems to be at odds with Yan’s promises for growth. Advocacy group Responsible Wagering Australia (RWA) has criticised the new budget, and the decision to double the annual bookmaker and betting exchange tax cap in particular.
Describing it as “economically reckless”, RWA cautioned that the move was not in any way consulted with the industry.
Going through NTG’s online newsroom shows a number of press releases addressing some of the strategies set out in the new budget, but no direct mention has been made regarding the taxation changes for the gambling sector, a key economic cogwheel.
RWA reminded that the licensed online wagering sector fueled the Northern Territory coffers with AU$150m in FY23 alone, contributing AU$47.7m in tax and levies and a further AU$46m in wages for local staff.
Furthermore, the group pointed out that the tax increases “perplexingly” precede the NTG’s own Racing Industry Review – a review set for completion by 30 June that aims to assess the racing and wagering sectors’ future viability and sustainability within the regional economic context.
Kai Cantwell, CEO of RWA, said: “It sends a message that consultation, process and industry sustainability have taken a back seat to short-term revenue grabs.
“We are calling on the Treasurer and Chief Minister to reconsider this decision and to engage in genuine consultation with the industry before moving forward.”
Cantwell further noted that the measures will inadvertently put wagering service providers at risk, which would in turn bottleneck investments and put jobs at risk.
Concluding his message with a call for action, Cantwell said: “We are calling on the Treasurer and Chief Minister to reconsider this decision and to engage in genuine consultation with the industry before moving forward.”
