What is a “revenue unit”? What is it increasing to?
In the NT, “revenue units” are used as a simple way of maintaining the real value of specified fees and charges while taking into account inflation. In the NT, fees and charges are often described as being multiples of a “revenue unit” rather than dollars.
At present, the current value of a NT “revenue unit” is $1.35. However, from 1 July 2024 the amount of an NT “revenue unit” will increase to $1.41.
How will the “revenue unit” increase affect my wagering tax liability?
Under section 106 of the Racing and Betting Act 1983 (NT), NT sports bookmaking and betting exchange licensees are liable to pay wagering tax calculated at a rate of 5 per cent of their gross monthly profits, up to the maximum of 1,000,000 revenue units in any given financial year.
Therefore, the new increase to the “revenue unit” amount will result in a potential increase in wagering tax liability for NT licensees. The maximum wagering tax cap will increase from $1,350,000 (in the 2023-2024 financial year) to $1,410,000 (in the 2024-2025 financial year).
Please note that the concept of a wagering tax being capped each financial year, as well as the amount of the cap, remains in the Racing and Wagering Act 2024 (NT) which is due to replace the current legislative regime. This new Act is expected to take effect from 1 July 2024.
How will the increase affect my bookmaker licence application or licence renewal?
Currently, entities wishing to apply for a sports bookmaking licence, or a renewal of a sports bookmaking licence, are required to pay a fee of 20,000 revenue units (and 200,000 revenue units for betting exchange operators).
From 1 July 2024, the increase in the “revenue unit” will result in an increase in the application or renewal fee from $27,000 to $28,200 for sports bookmaking licences. Costs for sports bookmaking and betting exchange operators are set to align from 1 July 2024.
Please note the current application and renewal fees are prescribed in the Racing and Betting Regulations 1984 (NT). However, the introduction of the new Racing and Wagering Act 2024 (NT) will result in new regulations being introduced to replace the existing regulations. These new regulations, including provisions regarding the amount of application and renewal fees, are currently the subject of industry consultation.
Next steps
We recommend that NT licensed wagering and betting exchange operators are aware of the upcoming changes to the NT “revenue units” to ensure that they understand its potential exposure in relation to wagering tax as well as application and renewal fees.
If you are unsure, please contact Senet to discuss this matter, including the introduction of the new Racing and Wagering Act 2024 (NT).