Northern Territory Explanatory Statements

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RACING AND BETTING AMENDMENT BILL 2009

2009

LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

TREASURER

RACING AND BETTING AMENDMENT BILL 2009
SERIAL NO. 65

EXPLANATORY STATEMENT


GENERAL OUTLINE

This Bill amends the Racing and Betting Act from 1 January 2010 to:

· replace the Northern Territory’s current bookmakers turnover tax with a tax based on gross monthly wagering profits;

· cap the tax that each bookmaker has to pay to a maximum of $250 000.

NOTES ON CLAUSES

Clause 1. Short title

This is a formal clause which provides for the citation of the Act. When passed, the Act may be referred to as the Racing and Betting Amendment Act 2009.

Clause 2. Commencement

This clause provides for the Racing and Betting Amendment Act 2009 to commence from 1 January 2010.

Clause 3. Act amended

The Act being amended is the Racing and Betting Act.


Clause 4. Amendment of section 4 (Definitions)

Subclause (1) inserts a new definition for the term “bookmaker tax” in section 4 of the Racing and Betting Act. Bookmaker tax is a tax based on the gross wagering profits of bookmakers. Bookmaker tax is provided for in new section 106(1) of the Racing and Betting Act as a result of clause 6.

Subclauses (2), (3) and (4) make minor amendments to definitions in section 4 of the Racing and Betting Act to give effect to current drafting practice.

Clause 5. Amendment of Part IV, Division 5 heading

Clause 5 makes a consequential amendment to the heading of Part IV, Division 5 of the Racing and Betting Act to reflect that turnover tax is being replaced with “bookmaker tax”.

Clause 6. Repeal and substitution of sections 106 and 107

This clause repeals and substitutes sections 106 and 107 of the Racing and Betting Act.

New section 106(1) provides that a bookmaker must pay to the Racing Commission, by the 14th day of each month, a tax on their gross monthly profit for the previous month.

The 14th day of each month aligns with the obligation of a bookmaker to lodge a return by the same day each month, as provided for in new section 107. A bookmaker is defined in the Racing and Betting Act as a person who is a sports bookmaker, a registered bookmaker or a country bookmaker. These terms are defined in the existing Act.

New section 106(1)(b) provides that the tax rate is 10 per cent of the bookmaker’s gross monthly profit. The term “gross monthly profit” is defined in new sections 106(5) and (6).

New section 106(2)(a) caps the amount of tax that a bookmaker will pay at a maximum amount equivalent to the monetary value of 250 000 revenue units for a financial year. The monetary value of a revenue unit is currently $1 and as a result the maximum cap for a financial year will be $250 000. Also, when the monetary value of a revenue unit increases pursuant to the Revenue Units Act, due to increases in the Consumer Price Index for Darwin, there will be a corresponding increase in the maximum amount of tax that a bookmaker will have to pay.

New section 106(2)(b) provides that a different maximum cap can be set by way of regulation.

New section 106(3) provides that it is an offence for a person to fail to pay tax in accordance with the Racing and Betting Act. This is consistent with the offence currently in section 106 of the Racing and Betting Act.

New section 106(4)(a) provides that bookmaker tax is recoverable by the Racing Commission as a debt and new section 106(4)(b) provides that a person guilty of an offence under new section 106(3) may still be ordered by the court to pay the tax outstanding.

New sections 106(4)(a) and (b) are consistent with the provisions currently in sections 106(3) and (4) of the Racing and Betting Act. The provisions have merely been restated in accordance with current drafting practice.

Similarly, new section 106(4)(c) restates existing section 106(5) of the Racing and Betting Act in accordance with current drafting practice.

New section 106(5) provides for the meaning of the term “gross monthly profit”. The gross monthly profit is calculated by subtracting from the total amount of bets, i.e. the turnover of the bookmaker, the total amount of winning bets.

New section 106(6) provides that sports bookmakers are not required to pay tax on gross profits in relation to amounts wagered by persons located in Australia on sporting events other than horse, trotting or greyhound races. This is consistent with the position since 1 July 2000 of not imposing turnover tax on amounts wagered by persons located in Australia with sports bookmakers on sporting events other than horse, trotting or greyhound races.

This position resulted from the introduction of the Commonwealth GST when the tax payable on turnover was reduced by an amount equivalent to 9.09 per cent of player loss. For sports bookmakers this resulted in the rate of turnover tax reducing from 0.5 per cent to nil for these events.

New section 106(7) ensures that reference to an amount of bets with a bookmaker includes reference to an amount of bets by a person acting on behalf of the bookmaker. This is consistent with existing section 106(1) of the Racing and Betting Act.

New section 107 provides that a bookmaker must lodge a return by the 14th day of each month. The information required to be included in the return is the same as that currently required in section 107 of the Racing and Betting Act.

Other than changing from weekly returns to monthly returns, section 107 has been restated in accordance with current drafting practice.

Clause 7. New Part X

Clause 7 inserts a new Part X, containing new sections 157 to 160, into the Racing and Betting Act to provide for transitional matters relating to the amendments.

New section 157 defines the term “amending Act”, which is used in new sections 158 and 160, as the Racing and Betting Amendment Act 2009.

New section 158 provides that the amendments to sections 106 and 107 of the Racing and Betting Act as a result of clause 6 above, only apply to a bookmaker’s gross monthly profit and wagers for January 2010 and each subsequent month.

New section 159 limits the amount of the bookmaker tax to a maximum of the amount equal to the monetary value of 125 000 revenue units for the 2009-10 financial year for a bookmaker. This equates to $125 000 and represents a pro rata of the full financial year cap of 250 000 revenue units for the period from 1 January 2010, which is when the amendments commence, to 30 June 2010.

New section 160 ensures that any obligations that a bookmaker has in relation to turnover tax under the existing provisions of the Racing and Betting Act must still be met notwithstanding the change to the bookmaker tax regime from 1 January 2010.

Clause 8. Further amendments

This clause introduces a Schedule that makes minor consequential amendments to the Racing and Betting Act to reflect that turnover tax is being replaced with “bookmaker tax”.

The Schedule also makes minor consequential amendments to the Racing and Betting Act to give effect to current drafting practice.

 

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