GAMBLING TAXATION BILL 2023

Second Reading

Danny O’BRIEN (Gippsland South) (18:14): I am pleased to rise and get the jump on the Gambling Taxation Bill 2023 and speak a little bit about this piece of legislation, which is effectively the second tranche of legislation in relation to the racing industry and betting and gaming arrangements that we have had this week but also has some significant changes, as the minister just outlined, to the casino taxation arrangements – the final tranche of the recommendations coming from the Royal Commission into the Casino Operator and Licence headed by Ray Finkelstein.

I think it is important to just go back to that a little bit. The royal commission actually came about as a result of the Bergin inquiry in New South Wales, which found out more about what was going on in Victoria than the former Victorian Commission for Gambling and Liquor Regulation, the regulator here in this state, under the watch of the current Labor government, where the casino had been engaging in incredibly bad behaviour. Indeed I will quote from the royal commission. Commissioner Finkelstein actually said:

… for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful. This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.

So when the minister talks about cosy deals done with this side of Parliament, we can refer to what was going on at the casino under the supposed watch of the current Andrews Labor government. It took a New South Wales inquiry for the information to come to light about what was actually going on at the casino. So it is a bit disingenuous for the minister to talk about what happened in the 1990s when the Kennett government inherited, of course, the decision to introduce a casino from the Kirner government, when in fact there was so much, in the words of Commissioner Finkelstein, ‘illegal, dishonest, unethical and exploitative’ action going on by the casino under this government’s watch.

I think we have had three previous tranches of legislation to implement the royal commission’s recommendations. This bill implements the final recommendation, which does a couple of things. Basically it introduces new casino taxation arrangements so that, rather than being administered by the Victorian Gambling and Casino Control Commission, the casino’s tax will now be under the purview of the commissioner of state revenue, so the State Revenue Office. It also introduces an increase in the casino tax. The gaming machine tax on electronic gaming machines operated by Crown will be increased so the taxation rate will be the same as EGMs operated by club venues. It is interesting to note, of course, in the context of the matter of public importance debate we have just had on the government’s mismanagement of the economy and the budget, that this will net the government an expected $30 million additional revenue a year. It is small change, given the size of the deficit and debt that we have got in this state, but every little bit helps, as I am sure the Treasurer is saying. I certainly do not disagree with the move to increase that tax on the casino’s EGMs.

There are some technical changes as well, with the casino taxation arrangements being extended to apply under the Taxation Administration Act 1997 and the consolidation of some of the other various gambling taxes. That is agreed, I think, by most. I certainly thank my colleagues the member for Sandringham and the member for Gippsland East. We have all coordinated the opposition’s response on these two bills, given the interrelationship between them. Certainly the member for Sandringham has coverage of this legislation as the Shadow Treasurer, but it really is largely a casino and gaming bill. Not surprisingly, that is why the minister has spoken so early in the piece for the government members as well.

The other part of it that I touched on is the increase in the point-of-consumption tax (POCT). When I say this is part of a double act this week in Parliament, it really is the second part of the changes for the racing industry here in Victoria. This bill will increase the point-of-consumption tax from 10 per cent to 15 per cent. I am sure the minister at the table, the Minister for Racing, is pretty stoked about that. He has had a win for his sector, because they are pretty happy; I am not sure that he is going to get Christmas cards from various of his colleagues. This is an increase effectively to offset the expected loss of revenue that will come from the wagering and betting licence, which was the subject of the Gambling Regulation Amendment Bill 2023 that we debated yesterday. That obviously has changed in the context of the increase in corporate bookies and online gambling – the fact that Victoria no longer has the ability, effectively, to operate a monopoly wagering and betting licence to the extent that it once did under the old TAB. There is much competition for the punter’s dollar, and that means that the joint venture as it has been up until now between Tabcorp and the Victorian racing industry is not likely to be as lucrative as it was even at the last iteration of the licence issued in 2011.

What the government is proposing here – and what the Minister for Racing is grinning about like a Cheshire cat – is an increase in the point-of-consumption tax to offset that, with an agreement between the government and the industry that 4 per cent of that 5 per cent will go to the racing industry. Therefore in total, from the new rate of 15 per cent point-of-consumption tax, 7.5 per cent will go to the racing industry. That is estimated by the Department of Treasury and Finance to deliver, I think, an annual figure in the next three or four years of about $119 million to $120 million, subject of course to turnover, but that will give the industry some certainty. I know the member for Sandringham and the member for Gippsland East – like, I am sure, the government – have made it pretty clear that is a good deal for the industry, and it should not be coming back to the taxpayer for support. It is important for the industry to make sure that it grows its own revenues and does its best to deliver a solid future on the back of these arrangements now being put in place by the government.

Whilst 1 per cent of the tax is going to the Treasurer – he will be trousering that, but it is to the people of Victoria – we suspect that that 1 per cent may end up going back to the industry as well given that the government has a secret MOU with the industry.

Anthony Carbines interjected.

Danny O’BRIEN: You can laugh, Minister for Racing, but it is secret because no-one has seen it other than the government and the industry. I am sure there is nothing nefarious in it – I am sure – but a bit of transparency might be nice. We understand that that MOU guarantees about 90 per cent of the previous funding that the industry received to the industry going forward, and so it may well be, subject to what the government does with the licence, that that money will also end up going to the industry.

I just want to touch briefly on the issue that I raised yesterday with respect to the licence, which is absolutely relevant to the increase in the POCT, and that is that the government still has not addressed the issue of the intellectual property currently held by the joint venture in Tabcorp. This consists of thousands and thousands of customers in a database who are customers of the current joint venture. There is debate. Certainly those seeking to win the tender for the new licence believe that should be made available to them, and if it is, that will no doubt going to make the licence much more valuable. I invited the Minister for Racing at the table, who followed me in speaking yesterday, to give some clarity on the IP issue, and I note that he steadfastly avoided it – he did not want to go there.

We are not going to go there from this side because we do not have access to the government’s legal advice as to what the intellectual property rights might be in this case, but we do believe that the government should be providing some clarity on that to the market. We have already seen one major bidder for the licence announce it is pulling out because it does not have any clarity on whether that IP is going to go with the licence, and there is the possibility that there will be no bidders. There have been rumours swirling around that a deal has already been done with Tabcorp and that it will simply get the licence rolled over. The government really should be explaining what is going on with the IP.

Anyway, this legislation sets up an opportunity for the racing industry and it implements some good measures on the casino. I look forward to the debate over the next couple of days.

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