Mr Viral
In a decisive move, the Australian federal government has announced it will cut off tax incentives to gambling operators for research and development (R&D) activities from 1 July 2025. The change was announced in the Mid-Year Economic and Fiscal Outlook (MYEFO) to ensure taxpayer funds are not used to compound gambling addiction and associated harms.
The Move Aligns with Australia’s Priorities
Federal treasurer Jim Chalmers stressed the moral and fiscal justification for the decision, framing it as one that would help reduce gambling-associated societal harm. The government made clear that R&D initiatives exclusively dedicated to harm reduction and responsible gambling projects would still be eligible for tax support, highlighting Australia’s ongoing commitment to consumer safety.
Research and development activities related to gambling can exacerbate addiction and associated harms. Excluding them will ensure that the government does not subsidize this type of R&D.
Jim Chalmers, Australia federal treasurer
This update will impact some of Australia’s most well-known gambling operators and suppliers, who have benefitted significantly from the R&D tax credit scheme. Data from the Australian Tax Office revealed that companies like Tabcorp, Aristocrat Leisure, and PointsBet had each claimed tens of millions in tax incentives.
These extra funds were the result of extensive product development spending, drawing the ire of public advocates who argued that taxpayer dollars shouldn’t be used to enhance gambling products. The move reflects a broader government push to curb gambling harm and regulate the industry. The crackdown follows rising public concern over rising gambling addiction rates.
Gambling Operators Expressed Concern
The announcement has generated strong pushback from industry representatives. Responsible Wagering Australia chief executive officer Kai Cantwell lambasted the government for making moral judgments through tax policy and warned of the precedent it creates for other industries. He expressed his fear such a mindset could undermine the coherence and certainty of Australia’s tax system.
The government’s announcement sets a dangerous precedent for how tax policy could be misused. If I represented fast food, alcohol, fossil fuels, or any other industry facing similar criticisms, I’d be worried.
Kai Cantwell, Responsible Wagering Australia chief executive officer
In contrast, public health advocates hailed the government’s decision, arguing that harm reduction should trump corporate profit. They note that by restricting tax benefits, the government sends a clear message that public money will not go toward subsidizing potentially harmful activities. A recent study revealed that losses per capita on gambling for 2022-2023 had soared by 11.5%, reaching AU$1,555 ($1,047).
While the research and development spending of the gambling industry has helped technological advancements, critics argue that these innovations often fuel addiction and compulsive behaviors. Removing these incentives might force businesses reliant on research and development credits to reconsider their investments, potentially slowing innovation. However, the gambling sector has proven resilient and should be able to adapt.
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