Higher sports betting taxes lead to increased prices for gamers and "inevitably" drive gamblers to illegal betting markets with better odds but fewer customer safeguards, the most recent Asian Racing Federation report states.
The group conducted a recent analysis on the impact of Betting Duty – tax levied by governments on betting services providers – on turnover, illegal betting and tax revenue of sports betting.
The report posited that, high Betting Duties lead to pressure for a higher takeout rate (for totalisator operators) and a higher theoretical margin (for fixed odds bookmakers) that results in higher prices passed on to customers.
This causes more people to migrate to illegal betting markets where prices or odds are better value, since illegal betting operators and customers do not pay any tax, and to a consequent decrease in legal betting as well as decreased taxation.
According to the report, government policy makers and gambling regulators should seek a ‘commercially reasonable and stable Betting Duty rate’ that provides a balance between channeling gambling demand to the legal betting sector and allowing licensed betting operators to effectively compete with the illegal market.
Source: Asia Gaming Brief
