Corporate bookmakers hurt by point-of-consumption tax

Australia’s corporate bookmakers will be the hardest hit should South Australia’s point of consumption tax be adopted by other states in the country, says CLSA analyst Anthony Longo in a note on Friday.

The analyst said that calls for a national point of consumption tax has been gathering in Victoria and New South Wales, who are considering imposing similar taxes.

Least affected would be Tabcorp / Tatts, said Longo. 

“While a higher tax is negative for wagering operators, it could result in a period of strong industry-wide revenue growth as was the case in FY15 when take-out rates were lifted in response to higher race fields fees. In addition to higher win rates, bookies may also be forced to cut marketing budgets, improving the competitive position of Tabcorp/ Tatts,,” he added.