The company’s earnings could drop with the new point of consumption tax on gambling introduced in the ACT.
Australia.- Davy stockbrokers has predicted that Paddy Power Betfair’s earnings will likely suffer after the government from the Australian Capital Territory (ACT) introduced a new 15 per cent point of consumption (POC) tax on gambling operators.
The new tax will be applied to revenue generated through bets places in the ACT. Betting operations will be taxed at 15 per cent for sports betting, horse racing and non-sport events. Davy said that it will likely wipe 1.4 per cent from Paddy Power Betfair’s earnings.
While analysts had expected the tax to be introduced in January 2019, the tax will come into force on October 1st, 2018. Davy said the news was “disappointing [because] there was increased hope that Queensland and New South Wales may opt for lower tax rates following Victoria’s decision last month to introduce an eight per cent rate from the start of next year.”