Death, taxes and the Wizzard of Odds...

[Lord Greystoke]

Interesting article chaps (best not be specific?)

http://www.theaustralian.com.au/business/gamblers-tax-fight-could-set-precedent/story-e6frg8zx-1226405991293

Note para 4 and the last!

LG

PS If you cant read the post bc Rupert has pay-walled you out, just put the following into Google...

Gambler's tax fight 'could set precedent'

[Lord Greystoke]

$36m gambling business just a hobby (http://www.theage.com.au/national/36m-in-profits-gambling-business-just-a-hobby-ato-told-20120802-23gpf.html)

Interesting read.

LG

[Shaun]

Not bad, just on 2.7% POT

[norisk]

ahh those TAB kickbacks are just wonderful, aren't they...

[Shaun]

I wonder if that profit was before or after the kickback.

[Raven]

the rebates would be the issue.

I bet the TAB's claim those as business deductions. I'm thinking the ATO can argue the rebate is assessable income, regardless of whether the operation is a gambling exercise.

[norisk]

exactly Raven, & so they should be taxable

[Chrome Prince]

The computer generated ratings, nor the size of the profit would be what attracted the ATO.
Firstly, profits in the tens of millions cannot be a hobby!

Secondly there is one distinct difference between the "group" and a professional gambler. A difference that would liable them to pay tax.
You can't label a business where the house has no advantage as gambling.
They are not chasing gamblers, they are chasing investors.

A gambler pits his wits against a house edge, and if he is lucky he can outwit the house edge. Sometimes he is good enough to consistantly outwit the house edge by skill. But the house still retains the overall edge. He is betting against an edge, by being selective.

The "group" is merely investing into a pool which has forsaken it's edge via rebates aka kickbacks. It is an investment. There is no house edge. It is not gambling when the odds are always in your favour overall regardless of being selective or not. There is no house edge to outwit, therefore like any investment, tax should be paid on return on investment, it is not tax on winnings, it is tax on return on investment.

The group referred to it as a cash cow!

They can lose 5% on the winner but get rebates up to 10% on turnover, therefore, they cannot lose.

There is a distinct advantage which they have tried to put down to computer software, and it doesn't wash with the ATO when winnings of 36 million are referred to as a cash cow!

[Shaun]

If the tab will lose out on these guys wages because of the rebate then what is the advantage giving them the rebate.

Why do they need these guys in the pool?

[Chrome Prince]

It was a bad decision by the CEO.
He saw a turnover increase as an increase in share value, must have had shares and must have had a clause somewhere in his contract.
Every other business commentator said it was the nail in the coffin, including the CEO of TattsGroup who slammed them for such business practices.

[Bhagwan]

Maybe they didnt pay that CEO the wage increase he demanded and this was his way of getting back at them.

Either that, or he is a complete dumb bum.

If they wanted to increase the turn over, then reduce the 18.5% take to say 11.5%
This includes that sneaky rounding down on amounts .50 & greater
This should increase their turn over, because punters will usually re-bet what they have won because they dont know when to stop betting until they have run out of money.

More money won - therefore more money bet.

You don't give an advantage to an eclectic few.
That's like giving money to the banks, who tend to keep most to themselves in the form of bonuses, instead of the Tax payer who pays 10% GST when spending it within the general economy.
The Govt. soon gets it all back in the form of all those 10 percent's' being turned over many times.

Same applies to the TABs

[norisk]

Your a man after my own heart Bhagwan

Unfortunately those with the power/brains/balls to make real positive changes are few & far between.

[garyf]

The computer generated ratings, nor the size of the profit would be what attracted the ATO.
Firstly, profits in the tens of millions cannot be a hobby!

Secondly there is one distinct difference between the "group" and a professional gambler. A difference that would liable them to pay tax.
You can't label a business where the house has no advantage as gambling.
They are not chasing gamblers, they are chasing investors.

A gambler pits his wits against a house edge, and if he is lucky he can outwit the house edge. Sometimes he is good enough to consistantly outwit the house edge by skill. But the house still retains the overall edge. He is betting against an edge, by being selective.

The "group" is merely investing into a pool which has forsaken it's edge via rebates aka kickbacks. It is an investment. There is no house edge. It is not gambling when the odds are always in your favour overall regardless of being selective or not. There is no house edge to outwit, therefore like any investment, tax should be paid on return on investment, it is not tax on winnings, it is tax on return on investment.

The group referred to it as a cash cow!

They can lose 5% on the winner but get rebates up to 10% on turnover, therefore, they cannot lose.

There is a distinct advantage which they have tried to put down to computer software, and it doesn't wash with the ATO when winnings of 36 million are referred to as a cash cow!Have posted an article on the general forum,
Under the thread "Interesting read" in relation,
Somewhat to C.P'S post here.

Any comments put on that thread may be better.

Cheers.
Gary.

[Lord Greystoke]

Don't get the the Fin Rev much these days but got a copy courtesy of father's day so read it, one will....

How the Punters Club made millions vanish (http://afr.com/p/national/how_the_punters_club_made_millions_4VUS8rus9nKSWxzE1saXZN)

and this...

Money magic makes billions disappear (http://afr.com/p/national/money_magic_makes_billions_disappear_oHyu9FiLwUcuPzefN3zg7O)


LG

PS Note links to Part 1-5 of the 'Gambler' series in article 1 above

[Lord Greystoke]

Wizzard of Odds settles with the reaper, moves on to another game... (http://www.smh.com.au/entertainment/art-and-design/mona-is-now-safe-art-museum-survives-ato-stoush-20121020-27xsi.html)

LG