Australia: Foreign Lottoland agency linked to tax revenue dip from local lotteries

Foreign Lottoland agency linked to tax revenue dip from local lotteries

Rob Harris, National politics reporter, Herald Sun

The rising popularity of ­Gibraltar-based Lottoland, in which people bet on the ­outcomes of overseas lotteries, is linked to a worrying dip in tax revenue from local lotteries, which must be spent on hospitals and charities.

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The Herald Sun can reveal $90 million has already been wiped off revenue forecasts over the next three years. And the $25 million lost this financial year could have covered the entire budget of regional hospitals in Castlemaine, Portland or Stawell.

The threat has been amplified by online bookie Tom ­Waterhouse’s William Hill, which recently did a deal with Lottoland to allow customers to bet on lottery results through its website.

Industry insiders warn the model risks dragging “low-harm” lottery entrants closer to gambling that is associated with higher levels of harm.

Lottoland offers bets on ­official lotto draws, pricing the wagers at a similar level to lotto tickets. In the event that someone “wins” a big jackpot, Lottoland relies on an ­insurance policy issued in ­Gibraltar to pay the “winner”.

Registered as a licensed bookmaker in the Northern Territory, Lottoland has an 8 per cent share of the online lottery market after just 18 months in Australia. It pays about $575,000 — an estimated 1 per cent of its annual turnover — to the NT government.

But lottery revenue in ­Victoria this year fell from $463 million to $438 million, and the state budget forecasts another $30 million will be lost next year and $34 million the year after.

Gaming and Liquor Regulation Minister Marlene Kairouz told the Herald Sun people should be aware that betting on overseas lotteries was “very different” from buying a ticket in a local licensed lottery.

“The government is aware of Lottoland and we’ll continue monitoring the emerging practice of betting on lotteries to make sure consumers aren’t misled,” she said.

The federal government is under pressure to strengthen consumer protection laws on online wagering, which do not stop bookmakers “aggressively pretending” they are lottery operators. The Australian Lottery and Newsagents Association said there was a need for urgent action.

Victoria’s Lottery Retailers Association chief Gary Carter said Lottoland’s business model was putting at risk about 3500 jobs at more than 800 local newsagents.

But Lottoland’s Australian chief Luke Brill said its impact on the lottery market had been “overstated”. “We’re broadening the market rather than cannibalising it,” he said.

http://www.heraldsun.com.au/news/victoria/foreign-lottoland-agency-linked-to-tax-revenue-dip-from-local-lotteries/news-story/9d3522ca30db5ffe0e41b8024bee5791