The Australian Rugby League is looking to upgrade its current gambling revenue model, after the country’s horseracing industry switched to a 1.5% turnover fee. However, the sportsbetting industry and gaming regulators are not on board with the idea.
According to recent reports, leaders in the country’s sportsbetting market have told the ARL that it would be wise if it stuck to its current gross profits model. Switching over to a turnover tax would generate more gaming revenue for the league; however, it would result in a big loss of sports sponsorship dollars.
“The gross profit model is the fair and equitable method to apply to sport, because it’s a low-margin business, sport, in comparison to racing,” says Matthew Tripp of SportsBet.
What works for the horseracing industry will not necessarily work for rugby. Since racing is a high margin industry, the turnover tax results in 25% of profits being paid out. With rugby’s lower margins, the turnover tax would cost bookmakers 75% of their profits. Causing great financial strain on the sportsbetting market, a turnover tax would certainly not be in the best interests of the ARL.