1. Gambling is not treated a profession (it's treated as a hobby) The government doesn’t see profits from gambling activities as income, but as a result of good luck; The Australian government taxes casino operators and lottery organisers instead. Of course, taxation varies from state to state. Taxes on Slot Machine Winnings in New Zealand.
2. In the United Kingdom, the government taxes the gross profits of casino operators rather than players. Canadians can play the lottery, live casinos, poker and online games without paying taxes unless they are a professional. Likewise, Australians and New Zealanders can also gamble tax-free.
3. Online casino gaming is prohibited in Australia under the Interactive Gambling Act 2001 (Cth) (Interactive Gambling Act). However, a person may still apply for an ‘internet gaming licence’ in the Northern Territory and offer their gaming products outside of Australia in certain circumstances.

October 16, 1997

In Australia, it is the gambling operators pay tax, not the players. The amount of tax the operators pay depends on the type of game and the location of the poker machines or casinos. There is no tax to pay for online Australian players either, despite a few online Australian casinos in operation.

Ban Online Gambling?
Australia Would Rather Tax It

By JERI CLAUSING

ASHINGTON -- While American politicians struggle to find a way to ban or at least restrict Internet gambling, Australian lawmakers have drafted a plan to use online gambling to boost their coffers.

Illustration: Nicole Schooley / CyberTimes

The government of Victoria, the largest of Australia's six states, announced this month that it would introduce legislation simultaneously to tax and regulate online gambling. The legislation is be based on a model developed earlier this year by gaming regulators from around the country.

The opposing approaches reflect not just a difference in the two nations' attitudes toward gambling itself but a contrast in their views of governmental jurisdiction over the Internet.

'I think it is fair to say that in Australia, where gaming is quite accepted, we have taken a very logical approach,' said Brian Farrell, manager of gambling operations and auditing with the Victorian Casinos and Gaming Authority in Melbourne. 'Over the years, every time we have had trouble with illegal forms of gambling -- phone book gambling, unlicensed casinos -- what we've done is provide a well-regulated alternative for people to access. That means the unlicensed activity drops to a relatively low level of significance. That same theory applies to the globalization of the Internet.'

The Australian approach, however, is on a direct collision course with the current political climate in the United States, where the National Association of Attorneys General is lobbying hard to get a bill through Congress that would ban Internet gambling in states that outlaw gambling.

'Gambling is a unique enterprise in the United States in that we have really allowed each state to set is own gambling policy,' said Jim Haney, a spokesman for the group's chairman, Wisconsin Attorney General James Doyle. 'Internet gambling upsets that scheme of local control and local decision making. '

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Haney added: 'Certainly, it is difficult to enforce state and federal laws when indeed you are dealing with an international communications system. However, the people in Australia, to the extent that they are targeting the citizens of Wisconsin, must comply with Wisconsin law. If they are distributing child pornography to this state, they cannot expect to escape prosecution. They should also not expect to escape prosecution for violating our gambling laws.'

Senator Jon Kyl, an Arizona Republican, is sponsoring legislation backed by the attorneys general that would give states the authority to force Internet service providers to block customer access to gambling sites in states where gambling is illegal.

Farrell, however, described that approach as unrealistic.

'I recently sat on a panel with various people from the United States and England who felt that our proposal was an intrusion on their ability to control the rights of their citizens,' Farrell said. 'We think the Internet is global. We don't think that gaming should be excluded, particularly since we've had phone betting for over 30 years.'

He added that despite Haney's warning, Victoria had no plan to exclude gamblers logging in to Australian sites from states and countries where gambling is illegal.

Albert Angel of ICN Ltd., an online lottery and horse racing results company and a board member of Interactive Services Association, the trade group for Internet service providers in the United States, said that regulating gambling is the most 'responsible course to take, because prohibition is going to lead to an underground industry.'

Gambling is legal in all six of Australia's states, where it produces annual revenues of $72 billion, Farrell said. In Victoria alone, Farrell said, gambling generates $1.2 billion in tax revenues, about 10 percent of all taxes collected in that state.

There are already a number of online gambling sites operating from within Australia, he said, so regulators from the nation's states and territories developed the regulation model that Victoria will present to Parliament in its next session, which begins in March.

'Victoria is the first of the states in Australia to announce that is proceeding to legislation,' he said. 'But we would expect that other Australian states and territories will take that position in the near future.'

Related Article Wisconsin Sues Over Internet Gambling (September 16, 1997)

Under the regulation model, gambling service providers would be established to set up accounts for online gamblers. The service providers would be charged with checking the identity and address of the gambler, then would tax their winnings and forward the levy to whichever taxing entity has authority in that person's community. In the case of international gamblers, the state in which the service provider is based would get the tax revenue, Farrell said.

Built-in protections are also planned.

'Under our model, players have an option to set limits on amounts,' Farrell said. 'You can't change those limits without a seven-day cooling off period. You would also be able to self-exclude by telling gambling regulators where you live. If you say, 'I can't help myself; I need to be excluded, that regulator will give notice to all gambling operators.'

Farrell said he expected there would be extensive checks before accounts could be established.

But Haney questioned the ability of Australia to regulate online gambling.

'There is regulation and there is regulation,' he said. 'And the position of Attorney General Doyle is that gambling just can't be overregulated.'

Haney continued: 'Let's say Australia is going to license and tax Internet gambling. That may be a money-making device for political subdivisions in Australia, but it is not the same as strict law enforcement oversight of the games. And consumers who gamble on those types of sites still need to be warned that they can be taken. They don't know who they are dealing with.'

Jeri Clausing at jeri@nytimes.com welcomes your comments and suggestions.

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The taxes applied to gaming and wagering in NSW are based on:

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Gambling tax rates

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Type	Description	Tax applied
Totalizator	A system that allows people to bet on outcomes and distributes betting revenue to the winning bets.	Percentage of player losses – ie bets placed less payouts.
Fixed odds	An operator agrees to pay specified amounts against specified events.	Rates vary.
Public lottery	A game of chance including a game such as lotteries, keno and soccer football pool.	Rates vary.
Point of consumption	Payable on all bets made by customers who are located in NSW.	10 per cent of the net NSW wagering revenue that exceeds the financial year threshold

Legislation

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Gambling taxes are regulated under the following legislation.