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Victorian Government Unveils Increased Taxes on Profitable Pokies

Thu, Aug 17, 2:32pm by Staff Writer

Just over a month after instituting a 20-year “freeze” on pokie licences, the Labor-led government in Victoria has announced an ambitious new tax plan targeting the most lucrative machines and operators.

Marlene Kairouz, who serves as Minister of Gaming and Liquor Regulation for the Andrews Government, announced the enhanced taxation scheme on August 11.

Beginning in August of 2022 – the same year that the number of pokie licenses issued across Victoria will be frozen at 27,372 – any machine in the state which generates between $6,667 and $12,500 in revenue per month will be subject to a special tax bracket. Machines which generate more than $12,500 in revenue will also be taxed at a higher rate.

Additionally, the various clubs, pubs, and hotels operating these high-performing machines will pay a higher annual tax. This measure will be achieved by virtue of reductions, made on a sliding scale, to tax concessions afforded to pokie operators.

A press release issued to announce the new taxes also included the following passage describing a new pricing plan for pokie machine placement:

“The price for gaming machine entitlements will be calculated using a formula based on a weighted average of a venue’s gaming machine revenue over the past four financial years, with a minimum price applying to club and hotel entitlements.

The price paid by new entrants to the market will be calculated using the average gaming machine revenue at a venue of similar size, type and location.”

In her own public comments, Kairouz framed the increased taxes as a compromise of sorts between anti-pokie activists, the operator industry, and the government’s own interests:

“We’re ensuring venues that earn the most from pokies pay the most back to the Victorian community.

The price and tax rates that we have announced are fairer – and will secure important funding for health and community projects across Victoria.”

Our pubs, clubs and hotels employ thousands of Victorians. Today’s announcement will give them the certainty they need to plan and invest in the future of their local communities.”

Victoria has become a hotbed for pokie addiction awareness campaigns in recent years. This controversy was accelerated in 2015, when the Victorian Commission for Gambling and Liquor Regulation (VCGLR) published data revealing that residents of the state lost more than $2.5 billion playing pokies for the second straight year.

In addressing the state’s initiative to institute heavier taxes on operators, Alliance for Gambling Reform (AGR) spokesman Kelvin Thomson referenced that astounding figure when speaking to the Herald Sun:

“There is a case for higher tax rates but what we are not seeing is action to reduce gambling harm and reduce losses.

It is a recipe for the continuance of $2.6 billion lost every year on poker machines in Victoria.”

Reverend Tim Costello, who has long lobbied for statewide reform to remove pokies outright, also told the Herald Sun that the government’s plan was insufficient:

“In principle I agree but if the government thinks they can do this and sweep it under the carpet … it needs to realise we won’t accept it.”

The community is sick of the number of addictive pokies in the poorest areas.”

When the Labor government released its budget this May, it forecasted $1.12 billion from pokie taxes for the current financial year, a figure which was estimated to rise to $1.17 billion by 2021-22.

With the government’s reliance on pokie revenue in mind, the Victorian Greens took aim at Labor, alleging that the ruling party has put economics over ethics.

In a statement issued in response to the licensing freeze announcement, Victorian Greens spokesperson for gambling Colleen Hartland accused Kairouz of turning a blind eye to pokie addiction in her home district:

“Pokies rip billions of dollars from Victorian communities each year, and Labor is now locking in this crisis for another three decades.

Labor is addicted to the tax revenue from these machines, and time and time again it’s the poorest communities that get hit the hardest.

The Gambling Minister’s own electorate of Kororoit is the worst area in Victoria for pokies losses. She’s putting profits before her own people. She won’t even stand up for her own community.”

Adding fuel to the fire, Kairouz and the VCGLR proposed allowing pokie players to move money between machines using tickets alone, rather than making “cash in / cash out” transactions.

Anti-pokie advocates immediately criticised the move, which was made public yesterday, as counter to the harm minimisation rhetoric espoused just days before.

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