The long-term sustainability of the Queensland racing industry has been secured following today’s (Monday’s) funding announcement from the Palaszczuk Government including a new 5% racing levy.
In conjunction with the up-coming State Budget, new legislation will be introduced to streamline a variety of complex wagering and industry funding arrangements that presently exist from December 1, 2022.
As a result, the state’s Point of Consumption Tax (POCT) will rise from 15% to 20%, and will now incorporate bonus bets, which previously could be deducted by Wagering Service Providers (WSPs).
As part of the tax reform, 80% of POCT receipts will be returned to Racing Queensland – up from 35% – to help replace three existing funding streams including the Country Racing Program.
Treasurer Cameron Dick said the change would create an enduring funding stream for the Queensland racing industry.
“At present, a lot of the funding that goes to the racing industry is in the form of short-term government funding programs,” he said.
“Now, the industry will have the certainty of knowing they will get 80% of the betting tax, and if the size of the pie grows, so too will their share.
“The significant growth in online betting over the last few years has led to a very different wagering market in Queensland and we need to adapt.
“The Palaszczuk Government is levelling the playing field for all wagering operators and ensuring that organisations profiting from Queensland’s thriving racing industry are investing into its future too.”
The tax reform will apply to all WSPs, including TAB, with the industry able to directly benefit from what it creates.
Since the onset of COVID-19, Australia has experienced an abnormal trading environment, with lockdowns, reduced sporting content and restricted travel all contributing to increased wagering and digital consumption.
Racing Minister Grace Grace said the changes were good news for racing clubs, participants and race attendees.
“While Tabcorp will still offer oncourse betting services and retain retail exclusivity, its on-course ‘sponsorship and advertising’ exclusivity will end once these changes take effect,” she said.
“This means race clubs across Queensland will have opportunities to enter into new sponsorship agreements with other wagering service providers.
“Other benefits of the agreement include a further injection of $50 million from Tabcorp to cater for future racing infrastructure needs, and a one-off payment of $100 million to Racing Queensland.”
As a result, the new-look funding arrangement is set to provide a more sustainable future for the industry’s 43,469 participants and 125 clubs.
“The introduction of the racing levy by the Palaszczuk Government will ensure investments in jobs, events and communities will continue to grow,” RQ Chairman Steve Wilson AM said.
“Over the past five years, the industry’s economic contribution to Queensland has grown to $1.9 billion and delivered 4,000 additional jobs in the Sunshine State.
“On an annual basis, 85 communities host a race meeting that is either the biggest or second largest event for the year.
“We are grateful to the Palaszczuk Government for their ongoing support and will make further announcements relating to prizemoney increases, infrastructure investments and industry funding ahead of its proposed implementation on December 1.”
As part of the announcement, RQ will settle its Supreme Court litigation with Tabcorp, which has been ongoing since 2019, once the tax reform has been implemented.
Tabcorp will be required to make a $150 million settlement payment to the State and RQ, which has been disclosed to the ASX, and this will be utilised to further invest into the long-term sustainability of the Queensland racing industry.
As a part of the settlement, Racing will benefit from a $50 million injection into the Racing Infrastructure Fund via Queensland TAB’s retail exclusivity agreement with the State.
As a result of the litigation settlement, the Queensland Product and Program Agreement between TAB and RQ will cease and QTAB will commence paying POCT and Race Field Fees consistently with all WSPs.