South Australian Govt Missing Millions Thanks To Online Gambling
Online gambling is clearly understood to be diverting tax money from state coffers as punters go colder on poker machines and give online pokies from the likes of PartyGaming, Centrebet, PKR, Virgin, Roxy Palace, Captain Cooks Casino and Media Man white label type deals a go.
The most recent figures show a significant dip in the amount gamblers pour into the state's pokies and a $10 million annual fall in tax revenue. State Government analysis shows punters put $729 million into pokies in the past financial year, compared with $750 million in the 12 months to June 30, 2009. The result is the lowest annual outlay on poker machines for 6 years and has resulted in a Government gaming tax revenue drop from $292 million to $282 million in the past year.
Experts say mass-media advertising campaigns have driven a dramatic rise in the popularity of internet gambling, which sidesteps traditional tax regulations. South Australian pubs and clubs have also suffered an $11 million revenue hit, which comes as smoking bans look to further harm the sector. Australian Hotels Association general manager Ian Horne said competition from both sports betting and online gambling outlets was placing major pressure on the industry.
"The sports betting market is expanding enormously," he said. "Just look at the betting options for the federal election. The promotion of betting odds was unprecedented. It's becoming the normal way of life to bet on anything and everything." Horne said poker machines had been unfairly "demonised" while other gambling options were considered socially acceptable.
A spokeswoman for Gambling Minister Tom Koutsantonis said the decline could be attributed to reduced household expenditure for recreational activities.
"This expenditure is also affected by the Reserve Bank's increasing of interest rates over the past 12 months," she said. The spokeswoman also said the Government was working to reduce the number of pokies, despite figures showing 7 more in use now than last year.
"There is always some variation in the number of live machines, as gaming venues may not use all of their entitlements, for example during renovations," she said.
"The Rann Government is committed to reducing pokie machine entitlements by 3000. "So far the Government has removed more than 2200 gaming machine entitlements from SA venues." Treasurer Kevin Foley has warned the state to brace for a tough September 14 Budget, saying the lingering impact of the global financial crisis has diminished revenue. Media Man and Gambling911 have strong reason to believe that online gaming and gambling will continue to grow in the Australian - Asia Pacific region, and many land based venues will continue to be hit hard.
Tasmania: $8 Million Jump With Betfair Deal...
A taxation cut offered to James Packer 50% owned betting agency Betfair will cost Tasmania about $8 million more than first promised over the next two years, the Liberal Party claim. The deal Labor offered Betfair just before the state election is now up in the air with the Liberals holding off on giving their support to the legislation. With the Greens Party already declaring they are opposed to the deal to cut Betfair's tax rate, the legislation's success now depends on the support from the Liberals.
The tax break has created a split between Labor and the Greens' Cabinet representatives, leader Nick McKim and Cassy 'O God' (MM tag) O'Connor. As part of the power-sharing arrangement between the two parties, the Greens can choose to remove themselves from a Cabinet vote if they disagree with the legislation being discussed.
When the tax break was announced in February Bartlett claimed the deal would reduce state revenues by about $2 million over two years. However, in the State Budget in June that figure had jumped to about $5 million a year, reducing revenue from Betfair from $7.3 million to just $2.4 million. The Liberals and the Greens sought a clarification this week on the exact costing. Treasury yesterday confirmed the cost would be more than first thought. The tax cut, already budgeted, will put a $5.3 million dent in state coffers this year, $5.1 million in the next financial year, increasing to $6.7 million in 2012-13 and $7 million in 2013-14. Treasurer Michael Aird said the Budget clearly outlined the reduced tax revenue from Betfair. He advised the Government had been transparent about the revenue dip.
"The level of fees, licences and taxes relating to that arrangement with Betfair would incur loss of revenue to the state. The figures in the Budget are a very clear indication of our estimate of the revenue we expect from Betfair," Aird said.
A spokesman for the Liberals said the party would vote on whether or not to accept the legislation. The key component of the deal is Betfair's tax rate, which is to drop from between 10 and 15% of gross earnings to 5%. Labor offered Betfair tax cuts to keep the company and its 130 employees in Tasmania. Betfair continues to enjoy boom times, getting a huge urge thanks to the Australian political election and the betting feeding frenzy.
A Media Man spokesperson said "(James) Packer's 50% owned Befair is now well and truly part of Australian culture. Having a punt is in our blood. It goes back to the convict ships, Captain Cooks crew and the like. We all used to have our favorite SP bookie, back in the good old days. Betfair identified market and gave the public a chance to get much better odds than the Government TAB, and they lapped is up. NRL and Australian political betting is powering along. It's what people discuss at home, work, cafes. I guess we all like to know who the smart money is on.
“Packer always wins, but in the information age, the web and all, we can all win. A lot of it gets down to where you get your information from. Not sure? Just ask horse jockeys and footy players. Hey, they were going to give them training for what constitutes insider trading. That's got to tell you a story punters".
Speaking of Crown Casino…They Are Back To Profit: Red Turns To Red...
The impressive casino, gaming and tourism - lifestyle operator hit paydirt as it swung back to net profit of $292.3 million, delivering a near-$1.5 billion turnaround after a net loss of $1.2bn in 2009-10. Last year's results at Crown were hit by a $1.44bn writedown on the value of the group's North American investments as the impact of the global financial crisis shook up the sector.
On a normalised basis, Crown's net profit rose 2.7% to $288.4m, from $280.7m a year before. Financial and gaming industry analysts were expecting normalised earnings of $276.7m, according to a Dow Jones poll of seven brokers - market-watchers typically forecast normalised earnings because it evens out in VIP - high roller gaming. Revenue from operations rose nearly 2% to $2.34bn. Crown declared a final dividend of 19 cents.
Shares in Crown were 2.91% higher in the past 24 hours, adding 24 cents to settle at $8.48, after having gained 1.6% immediately after the profit result. The benchmark S&P/ASX 200 was 0.7% higher.
For the first 7 weeks of the current 2010-11 financial year, Crown advised main floor gaming revenue grew by roughly 4% at its Australian casinos. VIP program play volumes have started the year "encouragingly", management said.
Crown's gaming venues include Burswood in Western Australia and the flagship Crown Melbourne casino. Their Macau ventures are are also performing strongly, with City of Dreams beating bean counter, public and news media expectations. Seems 'Our James' (Packer) can't put a wrong wrong lately. On ya Packer. You're doing Australia and and family name proud.
Greg Tingle, Media Man International
