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Victorian Councils Demand Overhaul of Pokies Tax Minimization Scheme

Victorian Councils Demand Overhaul of Pokies Tax Minimization Scheme

Posted on: Nov 22, 2023. Last Updated on: Nov 22, 2023.

Author: Lidia Moore Expertise: US Gaming, European Gaming Industry, iGaming

Victoria's Councils Demand Gambling Tax Reform

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A coalition of Victorian councils is calling for a major overhaul of the tax minimization scheme governing poker machine venues in the state. Their demand is driven by concerns that the current system allows these venues to exaggerate their contributions to the community while failing to meet their promises, particularly when it comes to charitable donations. The councils argue that some venues exploit sponsorships of local sports teams to attract residents to their gambling facilities.

Victoria's Councils Unite for Gambling Tax Reform

The heart of the issue lies in a scheme that grants tax breaks to Victorian clubs if they return 8.33% of their gambling revenue to community initiatives. However, the councils claim that the majority of these funds are reinvested into the clubs' own operational costs and upgrades rather than being allocated to genuine charitable causes, as they are often presented.

Mayor Ranka Rasic of Brimbank council expressed her frustrations, stating that her council had raised concerns about the scheme and called for reforms as early as 2021. She emphasizes that Brimbank, in particular, experiences a higher degree of gambling-related harm than any other government area. Rasic points out that the state government's reliance on income from gambling venues needs acknowledgment before any substantial change can occur.

In a show of solidarity, all councils in Victoria recently supported a motion urging the government to review the scheme urgently. Their primary goal is to ensure that gambling losses are channeled directly back into the community and community-led initiatives rather than being redirected for club enhancements.

The push for reform is primarily led by a group of mayors deeply concerned about the adverse impact of poker machines on socioeconomically disadvantaged communities, where gambling losses tend to be significantly higher.

The Greater Dandenong city council, situated on Melbourne's south-eastern fringe and among the most disadvantaged in Australia, faces staggering losses of approximately $801 per adult annually. This figure is nearly nine times higher than in more affluent areas like Boroondara, where losses amount to $94 per person.

Calls for Ethical Sponsorships amidst Gambling Industry Reform

The issue extends beyond just financial contributions; it encompasses the ethos of these sponsorships. Monash Council, for instance, has reported that some sponsorship agreements appear designed to draw more people into land-based casinos and gambling venues rather than genuinely supporting the community.

Such arrangements often require local sporting clubs to endorse gambling environments and actively encourage their members to attend electronic gaming venues, thereby intertwining community organizations with gambling promotion.

While these councils are rallying for change, the responsibility for revising the tax minimization scheme ultimately rests with the state government. The call for reform highlights the need for more transparent and accountable practices within the gambling industry, particularly in supporting communities and mitigating the harm caused by excessive gambling.