General News
23 January, 2025
R&D tax relief no longer available to betting companies
This content is provided by a third party.
This content is provided by a third party.
The Australian government has announced that companies in the gambling industry will no longer be able to access research and demand tax relief. The government has said it is making the move to help protect players, but critics have said that it will inevitably lead to some companies exiting the country, while others move their research and development efforts to other areas.
The move comes amid calls for changes to elements of Australian gambling laws, including ongoing calls for a total ban on gambling advertising.
Australia is known as the gambling capital of the world. New South Wales, in particular, is home to a huge collection of pokies. There are an estimated 90,000 machines in the territory, second only to Nevada as the state or region of the world with the highest concentration of gaming machines.
Online gambling is not regulated but there is a large selection of offshore books offering games to Aussie players. According to sports editor Steven Brown, offshore sites are legal to access and have a varied selection of games for players, including online pokies. These sites are regulated by trustworthy overseas regulators and are safe for Australian players to use.
Pokies are the nation's preferred gambling game, which is true in a lot of countries. But, whereas some countries only permit them in certain places, most of Australia has slots and gaming machines in pubs, bars, and even cafes and restaurants.
Their popularity has seen some of the biggest gambling companies in the world established in the country. Aristocrat is the biggest video poker machine manufacturer and is headquartered in North Ryde, NSW.
Until now, these gambling companies have been able to claim R&D tax relief. Money that is used to invest in certain types of research and development can be offset against the company's tax liabilities. The tax relief is said to encourage innovation from companies and help progress their business interests.
However, in October last year, tax office figures showed that gambling companies had claimed nearly $90m in tax relief in just one year. At the time, Treasurer Jim Chalmers described it as problematic that they had been able to claim so much in such a short space of time. He went on to say that the government may be willing to change it.
And so, before the festive break, the government announced that gambling activities and tobacco-related businesses would be unable to claim any R&D tax relief. The changes will come into effect starting from July this year. The government said that the changes would increase tax receipts by $12 million and reduce payments by $8 million, meaning a net gain of $20 million for the treasury.
However, not everybody supports the move. Responsible Wagering Australia has said that tax relief should be granted to all businesses regardless of industry and went on to say that eliminating the relief and payments will put Australian jobs, innovation, and investment at risk.
Kai Cantwell, CEO of the organisation, said that the move puts research and development in the industry at risk. He argued that the government could use tax relief as a bargaining chip in the future and that industries like the fast food and alcohol industries should be concerned about their own futures. He also argued that the change would see companies move their research and development efforts to other jurisdictions, meaning a loss of Australian jobs and innovation.
The government has also come under fire from some quarters as R&D tax relief investment has been declining in recent years. The amount of investment has fallen an average of 1.7% per annum over the last decade.
The changes don't come into effect until July, which means there is time for the government to change its mind. However, this seems unlikely, unless other industries and businesses get behind the gambling industry.
The sector has come under increased scrutiny in recent months. The government has faced calls for a blanket ban on gambling advertising. The current administration has been accused of siding with the gambling industry, although this latest move suggests that this isn't the case in all areas of business.
Gamble responsibly. Contact the Gambling Helpline for free and confidential support, information and counselling on 1800 858 858 or visit www.gamblinghelponline.org.au.
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