2nd August 2012, 01:47 PM
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Member
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Join Date: Jan 1970
Posts: 4,426
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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!
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