Fact sheet
Electronic gaming machine tax reforms
Why are reforms to
gaming machine taxation
necessary?
In 2008, the previous Government announced the introduction of a new industry
structure introducing electronic gaming machine (EGM) entitlement ownership from
16 August 2012.
The EGM entitlement arrangements included an expectation that the Government’s
share of EGM revenue would be ‘broadly similar’ and continue to average between
36 and 38 per cent (the ‘historical average’), as per the previous gaming operator
licences held by Tabcorp and Tattersalls.
The Government’s share has fallen to 34 per cent in 2012-13. Corrective action is
being taken to restore the Government’s share to the historical average.
What are the announced
reforms?
The Government will adjust the top two tax rates whilst at the same time lowering
the legislated minimum Return to Player (RTP) ratio to give venues the opportunity to
recover some of the taxation increase. The changes announced in the 2013-14
Budget Update are:
1.
The top two tax brackets for hotel and club venue operators will be
increased by 4.2 percentage points to restore the Government’s share of
EGM revenue to the historical average; and
2.
The minimum RTP ratio will be reduced from 87 per cent to 85 per cent,
providing greater options for venues in managing their operations and
bringing Victoria into line with the ratio applied in New South Wales and
Queensland.
The announced changes do not affect the bottom tax bracket, thereby maintaining
the club tax free threshold and hotel 8.33 percentage rate. The changes will
commence from 1 May 2014.
Attachment 1 compares the current and announced new EGM tax rates.
What is the expected
increase in government
tax revenue?
The table below outlines the estimated increase in EGM taxation revenue.
Under the Gambling Regulation Act 2003,the majority of EGM tax revenue is directed
to the Hospital and Charities Fund, Mental Health Fund and Community Support
Fund.
($ millions)
Estimates
2013-14
2014-15
2015-16
2016-17
Additional EGM
tax revenue
11.8
81.1
87.4
100.8
When will the reforms
come into effect?
The Government will introduce a Bill into Parliament in early 2014 to enact the
necessary legislative amendments, so that the changes commence from 1 May 2014.
How can I get further
information about the
reforms?
For further information contact the Victorian Commission for Gambling and Liquor
Regulation on
Phone: 1300 1 VCGLR (1300 182 457)
Email: [email protected]
Attachment 1
Current and announced new EGM tax rates
Current EGM tax rates
Announced new EGM tax rates
Club venue operators
Club venue operators
Tax is a function of monthly average-per-EGM
player loss.
Tax is a function of monthly average-per-EGM
player loss.
For that part of the monthly average player loss
which:
For that part of the monthly average player loss
which:

Does not exceed $2 666, the tax rate is
0.00%.

Does not exceed $2 666, the tax rate is
0.00%.

Exceeds $2 666 but does not exceed
$12 500, the tax rate is 42.5%.

Exceeds $2 666 but does not exceed
$12 500, the tax rate is 46.7%.

Exceeds $12 500, the tax rate is 50.00%.

Exceeds $12 500, the tax rate is 54.20%.
Hotel venue operators
Hotel venue operators
Tax is a function of monthly average-per-EGM
player loss.
Tax is a function of monthly average-per-EGM
player loss.
For that part of the monthly average player loss
which:
For that part of the monthly average player loss
which:

Does not exceed $2 666, the tax rate is
8.33%.

Does not exceed $2 666, the tax rate is
8.33%.

Exceeds $2 666 but does not exceed
$12 500, the tax rate is 50.83%.

Exceeds $2 666 but does not exceed
$12 500, the tax rate is 55.03%.

Exceeds $12 500, the tax rate is 58.33%.

Exceeds $12 500, the tax rate is 62.53%.