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Betting, gaming and lotteries sector to pay more taxes
Betting, gaming and lotteries sector to pay more taxes
News, Politics
Balford Henry | Observer Writer  
May 11, 2014

Betting, gaming and lotteries sector to pay more taxes

THE Government plans to impose additional fees, penalties and regulations on the betting, gaming and lotteries sector this year, which should increase its contribution to the public coffers well beyond the $4.1 billion it paid over last year.

A Bill, titled an Act to Amend the Betting, Gaming and Lotteries Act, was tabled recently in the House of Representatives by Minister of Finance and Planning Dr Peter Phillips. It includes provisions for the licensing of all persons working as bet writers, terminal operators and “prescribed workers” with bookmakers, as well as the licensing of lottery sales outlets and penalties for failing to pay the levy or tax on gross profits on April 1 each year.

The Bill also includes provisions for the days on which gambling institutions can operate, and the hours of operation; requiring approval for the commissioning and decommissioning of gaming machines; requiring applicants for licences or permits to satisfy the Betting, Gaming and Lotteries Commission (BGLC) that they are fit and proper persons; and to facilitate the expansion of betting outlets to include mobile betting shops for the sale of sports betting and lottery tickets.

The minister says in the Bill’s “Memorandum of Objects and Reasons” that the proposed changes are based on recommendations from the BGLC “to ensure that the conduct of betting, gaming and lotteries is “fair and free from criminal influence”.

He added that the changes will strengthen the regulatory framework land rules governing the operations of licensees under the Act.

However, it is obvious that another primary focus is to protect government’s take from the sector, and to widen the tax net to include more operators and employees, including bet writers, who make up the majority of the over 12,000 people employees in the sector.

Prior to March 2013, the sector’s unclaimed lottery winnings were shared 50/50 between lottery company Supreme Ventures Limited (SVL) and the Government’s CHASE Fund. However, since April 1, 2013, the unclaimed funds have been totally claimed by the government for its Consolidated Fund (budget) and the CHASE Fund.

Tax measures introduced by the minister last year, also ensured that the Consolidated Fund received an increase in taxes on the various Lottery Games (termed the Gross Profit Tax), up from 17 per cent to 20 for some lotteries, and from 23 per cent to 25 per cent for others.

In addition, BGLC tax rates increased from one per cent of weekly ticket sales to 1.8 per cent; and CHASE receives a single tax rate of 3.65 per cent of the weekly ticket sales, which was introduced to replace the multiple tax rates per game. However, there was no increase in tax rates for the betting sector.

In return, the Government allowed SVL to introduce Sunday Lottery sales, holiday opening (except Christmas Day and Good Friday), longer opening hours, and, most recently, Sunday sports betting.

From these initiatives, unclaimed winnings earned for the Government $329 million and accounted for a 9.7 per cent increase in total revenues earned from the lottery sector between April and December 2013,.

Total sales in all four sectors of the gaming industry for 2012 was $28.136 billion, with Government taxes earnings amounting to $2.989 billion, or 11 per cent. In 2013, the combined sector earnings totalled $32.98 billion, with taxes amounting to $4.121 billion.

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