Your journalist’s view of Gai Waterhouse’s position on the new 1.5% bookmaker turnover tax in NSW is flawed.

Gai is portrayed as a lone, discordant Cassandra-type voice in a universe of opposite views. But your writer has only reported the views of racing’s suppliers (owners and breeders) who make up just 2 per cent of the racing community. The other 98 per cent, being the punters, can’t understand why they are being forced to increase their subsidy to the mostly affluent people who like to breed and own racehorses.

Sadly for racing, like Cassandra, the legendary Greek prophet who was cursed to be disbelieved, Gai is almost certainly right in her prediction of racing’s dire future if we don’t get the funding sorted out for the long term. Gai’s view is based on:

First, the new taxes have huge legal problems: the recent TabCorp v Racing Victoria decision appears to mean the NSW method of calculating the new Race Fields taxes is illegal. Moreover, both the Betfair and the Sportsbet court challenges look unstoppable.

Second, if RacingNSW were to win, obviously some or all corporate bookmakers would take their internet business offshore - out of the taxing net.

Third, the racing industry’s financial forecasting is sub-optimal because unlike Victoria, NSW won’t hear of a “gross revenue” tax, yet:

·        Gross revenue is the Federal Government’s basis for bookmakers’ GST payments.

·        Gross revenue is already the bulk of the NSW TAB’s contribution.

·        The UK government was convinced by Prof Vaughan Williams (http://www.hm-treasury.gov.uk/cande1.htm) that a “gross revenue” model would yield more than a turnover tax and he has been proven absolutely correct, see http://www.nao.org.uk/publications/0405/gambling_duties.aspx .

The corporate bookmakers have offered to pay NSW a “gross revenue” tax. Racing would get more revenue than it does under the present turnover tax regime. Racing should grab it now while it can and work with the wagering community to increase the wagering pie to keep the industry we all love in a sound state.

Gai only has the best interests of her clients and racing at heart.  

Yours faithfully,

Rob Waterhouse

From ROB WATERHOUSE & THE MAILMAN, 05/10/2009

 

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