Gaming and Betting Tax Amendment Bill worries betting and horse racing groups

DURBAN - Horse racing and betting organisations have raised concern over the new Gaming and Betting Tax Amendment Bill, which potentially threatens their survival by halving their income, a development they say would lead to more retrenchments in the sector.

This comes after the KZN legislature’s introduction of the bill on December 10, 2021, following which it was published in the Provincial Gazette on January 7.

Gold Circle CEO Michel Nairac said the current division of proceedings involving betting on horse racing was put in place to assist in covering the costs racecourse operators incur to make racing events like the Durban July possible.

“The bill threatens the very survival of the horse racing industry, not just Gold Circle. It also threatens one of KwaZulu-Natal’s most popular events, the Durban July. This in turn has serious implications for the workers and their families,” he said.

He estimated a R70 million loss if the province was to lose the distinction of hosting the Durban July, Africa’s largest horse racing event which was started 125 years ago.

“Losses of this magnitude multiplied across the industry would be catastrophic. It is unlikely that Gold Circle would be able to revive the Durban July, which in turn would have ripple effects not only in the horse racing industry, but across the provincial tourism, hospitality and fashion industries.

“The national impact would be equally devastating. We would suffer both the economic loss and a loss of culture,” Nairac said.

According to Gold Circle, since 1976 racing operators have received from or via bookmakers a contribution towards the costs incurred by operators in staging racing and providing racing products for fixed odds betting.

This meant that winning punters of fixed odds bets pay a tax of 6% of winnings to the provincial fiscus and, in turn, half of that was paid by the fiscus to Gold Circle as a contribution towards the cost of staging the sport in KwaZulu-Natal.

Gold Circle claims that the new bill seeks to remove the company’s right to receive 3% as it provides that 1.4% would be diverted to the “Transformation Fund“, which would be under the control of the KZN Gaming and Betting Board.

Nairac said having lost more than two million jobs due to Covid-19 and countless more after the destruction in KZN during the unrest in July 2021, neither the province nor the country could afford the “disastrous” bill.

Basil Thomas, executive consultant to the Hollywood Sportsbook Group (Hollywoodbets), said there has been insufficient engagement with licensees and other affected parties.

Thomas said the redistribution of existing taxes and an increase in taxes could result in KZN becoming an unattractive destination for licensees to conduct their online businesses, which could effectively make the province an uncompetitive market.

Meanwhile, provincial treasury spokesperson Nathi Oliphant said the office of the MEC was not aware of the issues raised.

He said that the bill was anticipated to be transformative and to redress imbalances in an industry that has inherently benefited a few.

“KZN treasury values private sector partners and as such there is still a window until February 6 to make public comments before the bill is voted and passed by the legislature. Government has a number of platforms like the KZN Economic Council or the KZN Growth Coalition at which it engages with the private sector and industry on issues of economic pertinence,” Oliphant said.

KZN legislature’s Nomusa Phungula said it was premature to respond to any of the concerns raised, adding that interested parties could still submit comments and concerns.

“Interested parties were afforded 30 days to submit comments. Owing to the fact that the comments period still remains open, the committee has not embarked on its public consultation process as yet. The committee has not deliberated on the bill,” she said.

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