Victorian Clubs Exploit Loophole to Get Tax Cuts

Poker machine properties in Victoria seem to be exploiting the local laws to avoid taxes. As reported by The Guardian, venues have spent $184 million of gambling profits on themselves over the last financial year to get tax cut.

The clubs in question justified the money as a “community benefit.” For reference, Victoria allows clubs to reinvest 8.33% of their revenue into community initiatives to get a tax cut. However, clubs in Victoria would often label renovations and operating costs as community causes, thus getting tax cuts while using the money for their own good.

In the meantime, poker machine venues only spent $23,000 beyond what the law requires on gambling harm prevention measures and tools.

This scheme has evidently attracted some opposition, with opponents criticizing the clubs for exploiting the law and the state for not patching up the loophole. Hume City mayor Joseph Haweil went as far as alleging that the scheme is being rorted by the poker machine clubs. His critique echoes the words of Tim Costello in New South Wales, who has criticized a similar scheme in the neighboring state.

Victoria Is Introducing New Regulations

The aforementioned figures were just published by the Victorian regulator and show that clubs, in fact, spent only $13 million on actual community initiatives, such as gifts, sponsorships and donations. The rest of the $184 million the clubs spent on themselves to pay off operating costs.

Amid intense scrutiny, the Victorian government is currently working on some reforms and is tightening controls on casinos. Under a newly introduced bill, all gambling machines in all gambling properties (with the exception of Crown Casino) will have to shut down between 4 am and 10 am. The measure will come into effect from mid-2024.

In addition, the Australian state plans to introduce mandatory loss limits for daily poker machine losses, although this measure is still in development. The measure will likely force players to use a card to sign in and will help the state‘s crackdown on gambling-related fraud.

The reforms come in the wake of huge scandals involving Star Entertainment and Crown Resorts. Speaking of Crown, the casino and hospitality operator is currently trying to renegotiate its taxation terms with the State of New South Wales amid financial trouble.

At the same time, workers from the Crown Melbourne property are preparing to strike.