According to a recent report commissioned by Responsible Wagering Australia (RWA) and conducted by betting and gaming consultancy H2 Gambling Capital, Australians could suffer a staggering loss of nearly $3 billion in taxes due to illegal offshore gambling.
The Australia Offshore Wagering Market Analysis 2023 report projected that between 2022 and 2027, illicit activities in the black market could result in a tax shortfall of $3.35 billion. Additionally, the estimated tax loss from the grey market amounts to $3.32 billion. When combined, these figures indicate a potential total loss of $6.67 billion.
RWA emphasized that offshore gambling operators hold greater appeal for customers due to their competitive pricing and less stringent consumer protection regulations compared to licensed operators. To combat this issue, Kai Cantwell, CEO of RWA, stressed the need for future reforms in Australia to focus on eliminating the offshore market and removing it as a viable option for players.
Cantwell further stated,
“It is crucial that any future reforms strike a balance and prevent Australian players from seeking offshore alternatives where player protections are inadequate. Failing to maintain a well-regulated sports betting market could result in substantial economic losses for Australia, as well as negatively impact the sporting, racing, and broadcasting industries.”
The report highlights several significant findings regarding offshore gambling in Australia:
- Offshore Market Value: The illegal offshore gambling market in Australia has reached a value of over $1.1 billion, comprising approximately 15% of the country’s total gambling market.
- Growth of Onshore Market: The onshore market has experienced steady growth, with 92% of the online gambling market being based within Australia in 2022, compared to 82% in 2017.
- Onshore Operations: The report indicates that 96% of racing operations were conducted onshore in 2022, while sports accounted for 78% of onshore activities throughout the year.
- Gross Gaming Revenue (GGR): The estimated total GGR for 2022 amounted to $7.71 billion, and it is projected to further increase to $7.85 billion in 2023.
- Black and Grey Market GGR: The report estimates that black market activities generated approximately $571 million in GGR in 2022, while the grey market accounted for around $560 million.
These findings emphasize the significant presence and economic impact of offshore gambling in Australia, highlighting the need for regulatory measures to address this issue effectively.