2006 legislation aligns the rate of duty and formula for calculating duty on racing with that of casino gambling. Racing duty is set at 4% of gambling profits.

Sections 3 and 4 of the Gaming Duties Act 1971

The rate of duty and the formula for calculating duty on racing have been aligned with the rate and formula for casino gambling duty. Racing duty is set at 4% of gambling profits.

Background

The New Zealand Racing Board made a submission to government arguing that racing duty should be aligned with casino duty. Racing duty was previously set at 20% of betting profits, although because there were various concessions in the formula for calculating duty, the effective rate of duty was about 18%.

Key features

Racing betting duty is set at 4% of gambling duty. Section 4(1) sets the rate of duty at 4% of betting profits. Section 4(2) sets the formula for calculating betting profits as:

amounts - refunds - winning dividends

Amounts, refunds and winning dividends are defined in section 4(2). "Amounts" is the total of all amounts received by the New Zealand Racing Board or its agents for totalisator racing betting, sports betting and fixedodds racing betting. "Refunds" is the amount of refunds paid, and "winning dividends" is the amount of winning dividends paid out in respect of "amounts". Winning dividends are further defined in section 3 as the amount paid to a person for placing a winning bet, including amounts paid out of accumulated prize pools.

The effect of this formula is to align the calculation of racing betting duty with the calculation of casino gambling duty.

Application date

The new rate and formula for calculating racing betting duty will apply to all racing and sports betting on events for which results will be declared on or after 1 August 2006. Where an event is held over two or more days, it will be treated as having been held in the month in which the last day of the event occurs.