Racing Bets Levy Regulations 2009

The regulations establish several classifications that determine which levy rate applies. The most important is the distinction between a premium race meeting and a standard race meeting. A premium meeting is one that includes at least one race where the total stakes paid (excluding trophies) meet or exceed a dollar threshold. The threshold varies by racing code and date. For thoroughbred meetings, the threshold is $100,000 at all times. For harness meetings, the threshold was $50,000 before 1 August 2018 and $30,000 on or after that date. For greyhound meetings, the threshold has been $30,000 throughout. A standard meeting is any race meeting that is not a premium meeting. This classification matters because levy rates for premium meetings are consistently higher than for standard meetings, particularly for non-exchange fixed odds bets after August 2018.

The regulations distinguish between three bet types. A pari-mutuel bet is one placed in a pool from which the operator takes a commission and winning odds are calculated by dividing the remaining pool by winning bets. A non-exchange fixed odds bet is a fixed-odds wager that is not a betting exchange bet. A betting exchange bet is defined by reference to paragraph (b) of the definition of racing bet in the Betting Control Act 1954, which the regulations do not reproduce. In practice, a betting exchange bet allows punters to back and lay outcomes, with the operator taking commission on winnings rather than setting odds. The levy treatment for exchange bets diverged from other bet types from May 2021, moving to a pure gross-revenue basis after the turnover threshold.

Turnover is the denominator used for the base levy and for the alternative calculation in certain post-threshold scenarios. The regulations do not define turnover; it must be taken from the Betting Control Act 1954 or general usage. In Australian racing levy contexts, turnover typically means the total amount wagered, including the stake, not net of winnings paid. Gross revenue, by contrast, is not defined in the regulations but appears in regulation 6 (for non-exchange fixed odds post-August 2018) and regulation 7 (for exchange bets post-May 2021). Gross revenue presumably means the operator’s commission or net winnings after paying winning bets, but the absence of a statutory definition creates interpretation risk. The racing year runs from 1 August to 31 July; the turnover threshold is measured cumulatively from the start of the racing year, not on a calendar-year or rolling 12-month basis. This means an operator may cross the threshold partway through the year, triggering higher rates for remaining months even if monthly turnover subsequently falls.

The premium thoroughbred racing season is a concept used only in regulation 4 for bets placed between November 2012 and September 2014. It runs from 1 November to 1 January in the next year, catching the spring and summer carnival period. Bets on thoroughbred racing occurring during that window attracted a higher levy rate of 2% of turnover (rather than 1.5%) under the old regime. The concept is now obsolete for current betting but remains relevant for any historical liability or audit.

The de minimis threshold of $1,000 monthly turnover applies in all post-2013 regimes. If an operator’s total turnover from racing bets in a calendar month is below $1,000, no levy is payable for that month. This threshold is per operator, not aggregated across related entities. The threshold is low enough that most commercial operators will exceed it consistently, but it relieves micro-operators or casual bet-acceptors from compliance obligations.

The regulations directly affect any betting operator that accepts or places racing bets on Western Australian race meetings. The enabling provision, section 14A(2) of the Betting Control Act 1954, imposes the obligation to pay the levy. That Act applies to bookmakers, totalisator agencies, and other persons authorised to conduct betting in WA. The regulations then fix the amount. The scope extends to both on-course and off-course operators, and to online betting operators licensed in WA or who accept bets from WA residents on WA races. Operators who accept bets on WA races from interstate or overseas also fall within the levy if they are within the jurisdiction of the Betting Control Act.

The WA racing industry is affected indirectly. The levy is collected by the State and is likely used to fund racing administration, prize money, or industry development, although the regulations do not specify the destination. Higher levy rates on premium meetings and on turnover above the threshold mean that as wagering activity increases, the marginal cost to operators rises sharply. This may incentivise operators to limit their exposure to WA racing, particularly for high-stakes premium meetings where the effective levy rate can exceed 20% of gross revenue. The compliance burden is concentrated on larger operators who exceed the $3,000,000 turnover threshold; smaller operators who stay below that threshold pay only 1% of turnover (or less in historical periods) and are unaffected by the more complex per-meeting calculations.

The regulations also affect the classification of race meetings by racing clubs. Since the levy rate depends on whether a meeting is premium or standard, racing clubs that increase stakes for a single race (e.g., to attract better horses) may inadvertently trigger the premium classification for the entire meeting, raising the levy cost for all bets on that meeting. This creates a marginal cost for clubs considering stakes increases. Conversely, clubs that keep stakes just below the threshold reduce the levy burden for operators, which may be passed through in lower wagering costs or retained margins. The state government, as the regulator and recipient of the levy, has an interest in the level set; the successive amendments have generally increased the complexity and, for large operators, the effective rate over time.

Accountants and compliance officers for affected operators must maintain systems capable of tracking turnover by race meeting, by bet type, and cumulatively across the racing year. They must also classify each meeting using the stakes data published by racing authorities. Errors in classification can lead to underpayment or overpayment. The regulations do not provide a mechanism for the regulator to waive or adjust levy amounts, so operators bear the risk of misapplication.

The primary duty imposed by the regulations is to calculate and pay the levy to the relevant authority (likely the WA Gambling and Racing Commission or the Treasurer) each month. The amount is determined by applying the formula in the applicable regulation to the operator’s turnover and, where relevant, gross revenue for that month. The duty arises when racing bets are placed or accepted, not when the race occurs. The operator must also maintain records sufficient to demonstrate the calculation, including turnover by bet type, per meeting, and cumulative turnover from the start of the racing year. The regulations themselves do not impose record-keeping obligations, but the Betting Control Act and general tax law would require retention of evidence.

Operators have the right to rely on the de minimis threshold in regulation 6(6) and 7(4): no levy is payable for any month where turnover does not reach $1,000. This is a right of exemption, not a deduction or credit. The threshold is not cumulative across months; each month is assessed independently. An operator whose turnover fluctuates may owe levy only in months where turnover exceeds the threshold. The regulations do not allow operators to average turnover across months or to carry forward unused threshold.

For the post-August 2018 regime for non-exchange fixed odds bets, the operator must calculate the “race meeting amount” for each premium and standard meeting, then aggregate those amounts for the month. The race meeting amount is the greater of two figures: a percentage of gross revenue or a percentage of turnover. This creates a right for the operator to choose the lower of the two if they both produce the same amount, but in practice the operator must compute both and pay the greater. The operator does not have a discretion to rely on turnover if gross revenue would produce a higher levy and vice versa. This “greater of” test reduces the operator’s ability to use tax planning to minimise the levy.

The regulations do not confer a right to deduct the levy from punters’ winnings or to pass the levy on to customers. The obligation falls on the operator. However, the operator may of course adjust its pricing (odds, commission, or fees) to reflect the levy cost, subject to market competition. The levy is part of the operator’s cost base and will affect profitability.

Operators who believe they have overpaid levy may have a right to seek a refund under the Betting Control Act or general law, but the regulations are silent on refund mechanisms. Any dispute over classification (e.g., whether a meeting was properly classified as premium or standard) would likely need to be resolved with the racing association that sets stakes levels or with the regulator. The regulations do not provide an internal review or objection process.

The regulations themselves do not set penalties for late payment, non-payment, or underpayment of the levy. Penalties arise under section 14A of the Betting Control Act 1954 and the general penalty provisions of that Act. The Betting Control Act creates offences for failing to pay the levy within the prescribed time, and the court may impose fines. The regulations do not specify a due date for payment, so the timing obligation must be found in the Betting Control Act or any administrative arrangement. The regulations only set the amount; the enforcement framework is external.

The practical enforcement risk is that the regulator will audit operators, recompute levy liability using the definitions and formulas in the regulations, and issue assessments for any shortfall. Operators may face interest charges on unpaid amounts as determined under the Betting Control Act or the Taxation Administration Act 2003 (WA) if the levy is treated as a tax. The regulations do not create a statute of limitations for recovery, so historical periods remain open until the obligation is discharged.

Because the regulations are retrospective in coverage (affecting bets back to 2008), operators who have been in business since that time must ensure that their historical levy payments matched the correct regulation for each period. An operator who paid a flat 1% of turnover throughout the 2012-2014 period may have underpaid if they exceeded the turnover thresholds applicable at that time, which required higher rates for certain months. The 2012 and 2013 amendments introduced escalating rates and alternative calculation methods (the greater of 20% of gross revenue or 0.2% of turnover for the Sept 2008 to Nov 2012 period, and similar complexities). Auditors reviewing past compliance must disentangle which bets fell into which period, a non-trivial exercise.

The regulator may also seek penalties for incorrect classification of race meetings. If an operator systematically treated a meeting as standard when it met the premium thresholds, the underpayment could be substantial, particularly for non-exchange fixed odds bets under regulation 6 where the premium meeting rate uses 22.7% of gross revenue versus 13.6% for standard meetings. The regulations do not provide a safe harbour or good-faith defence, so operator diligence is essential.

The regulations are subsidiary legislation made under the Betting Control Act 1954, specifically section 14A(2) which provides that the amount of levy is to be prescribed by regulation. The Betting Control Act sets out who must pay, when, and the consequences of non-payment. The regulations only fill in the quantum. Any amendment to the Betting Control Act could alter the levy obligation directly, making the regulations inoperative or requiring amendment. The regulations also cross-reference the Racing and Wagering Western Australia Act 2003 for definitions of “greyhound race meeting”, “harness race meeting”, “non-exchange fixed odds bet”, and “thoroughbred race meeting”. Amendments to that Act would flow through to the definitions in the regulations. For example, if the Racing and Wagering Western Australia Act changed the definition of “thoroughbred race meeting”, the levy classification of meetings could shift without any change to the regulations themselves.

The regulations do not interact with Commonwealth taxation law, such as the goods and services tax or income tax, except that the levy is likely a deductible expense for income tax purposes. The levy is not a GST input tax credit because it is a tax-like impost, but this is not addressed in the regulations. The regulations also do not coordinate with racing levies in other states (e.g., New South Wales’ Racing Administration Act 1998 or Victoria’s Racing Act 1958). An operator that accepts bets on races in multiple states must comply with each state’s separate levy regime, and the WA regime uses its own definitions and thresholds that may not align with other states. This increases compliance costs for multi-state operators.

The de minimis threshold of $1,000 monthly turnover may interact with small business tax treatments or other WA regulatory thresholds, but no cross-reference is made. Operators must also comply with the Betting Control Act’s licensing and reporting requirements, which are separate from the levy calculation. The regulations do not purport to override any other law, and they must be read consistently with the parent Act.

The regulations have been amended six times since their original publication, as recorded in the compilation table. The original regulations (published 8 January 2010) set the levy amounts for bets placed from September 2008 onward, with the initial rate being the greater of 20% of gross revenue or 0.2% of turnover, or a flat 1.5% of turnover, at the operator’s election. The 2012 amendment (effective 13 October 2012) introduced higher rates for bets placed during the premium thoroughbred racing season and adjusted the threshold for the alternative calculation. The 2013 amendment (effective 1 April 2013) introduced a turnover threshold of $833,333 for the racing year, above which the rate increased from 1% to 1.5% of turnover, and added the $1,000 de minimis threshold.

The 2014 amendment (effective 1 October 2014) replaced the entire structure for bets on or after that date, creating regulation 5 with a $3,000,000 turnover threshold and differentiated rates by bet type and meeting classification. It also raised the premium harness meeting threshold from $50,000 to $30,000 for harness meetings from 1 August 2018, although that change was prospective from the 2018 amendment. The 2018 amendment (effective 7 July 2018) introduced regulation 6, which applied to bets from 1 August 2018. This was the most significant change: it replaced the turnover-only rates for non-exchange fixed odds bets with a per-meeting “greater of” calculation using turnover and gross revenue. It also increased the standard meeting non-exchange fixed odds rate from 1.5% to 2% after the threshold, and introduced separate rates for pari-mutuel and betting exchange bets that had previously been combined.

The 2021 amendment (effective 1 May 2021) added regulation 7, which created a separate levy for betting exchange bets from that date. This change removed betting exchange bets from regulation 6 and subjected them to a flat 1% of turnover initially, then 31.8% of gross revenue after the $3,000,000 threshold. The 31.8% figure is notably high compared to the pre-existing rates. The amendment also inserted a note in regulation 6 confirming its non-application to betting exchange bets after May 2021. Each amendment has increased the complexity of the regime and, for large operators, the effective levy rate.

There is no litigation history recorded in the regulations or in the parent Act that directly interprets these regulations. The compilation table and the text do not reference any court decisions. This is not surprising for a narrow, technical piece of delegated legislation that sets tax rates. Disputes are more likely to arise at the administrative level (audit assessments, classification disagreements) and be resolved without judicial determination. However, the potential for litigation exists in several areas. The definition of “turnover” and “gross revenue” is not provided, leaving room for interpretive disputes. An operator might argue that turnover should be net of cancelled bets or void races, or that gross revenue should deduct certain costs. The regulator may take a broader view. If the matter reaches a court, the outcome could have retrospective financial consequences for the entire industry.

Classification of race meetings as premium or standard could also give rise to a dispute. The stakes threshold is objective only if the racing club officially declares the stakes value. If a meeting plans to offer stakes equal to $100,000 but actual stakes paid fall short due to scratching of eligible horses, the meeting might cease to be premium. The regulations tie classification to the total amount of stakes “paid”, not “offered”. This temporal distinction could be litigated. Similarly, the premium thoroughbred racing season definition in regulation 3 uses “occurs during” rather than “bet placed during”, which could cause confusion when a bet is placed after the race but settled during the season period.

The regulations do not provide a dispute resolution mechanism, so any legal challenge would rely on the general jurisdiction of the WA Supreme Court or the State Administrative Tribunal under the Betting Control Act. The absence of litigation to date suggests that the industry has either complied broadly or that disputes are settled privately. But the increasing complexity, particularly the introduction of gross revenue calculations and per-meeting aggregation, raises the likelihood of future challenges.

Several features of the regulations catch the unwary. First, the retrospective application means that an operator who began accepting bets in 2008 must have a complete record of turnover by month, meeting type, and bet type for periods long past. The 2009 original regulations applied to bets from September 2008, creating a short retrospective window. Later amendments also applied to bets from a specified date, but the 2014 and 2018 amendments were prospective in application (October 2014 and August 2018 respectively), so the retrospective element is limited to the initial regime. Still, any audit of historical compliance will require data reconstruction if records were not kept in the required categorisations.

Second, the de minimis threshold of $1,000 monthly turnover is per operator, not per bet type or per race meeting. An operator that accepts both exchange and non-exchange bets must aggregate turnover across both types to assess whether the threshold is exceeded. If total turnover is $1,200, levy is payable on the full amount, not only on the excess. If turnover is $999, no levy is payable at all. This all-or-nothing feature creates a cliff effect: a small increase in turnover can create a large proportional levy liability (from $0 to potentially hundreds of dollars for that month).

Third, the turnover threshold of $3,000,000 is measured from the start of the racing year (1 August). This means an operator’s first month of the year may be below the threshold, but as cumulative turnover grows, the operator may cross the threshold mid-year. Once crossed, the higher rates apply to all levy calculated for that month and all subsequent months in the same racing year, even if monthly turnover in later months is lower. There is no reset or prorating. For an operator with seasonal peaks (e.g., during the spring carnival), the threshold could be crossed early, subjecting all later months to higher rates.

Fourth, the non-exchange fixed odds bet calculation under regulation 6(3)(e) and (f) requires the operator to compute the “race meeting amount” for each premium and standard meeting separately using the “greater of” test, then aggregate those amounts for the month. This is much more complex than a simple monthly turnover proportion. The operator must know gross revenue per race meeting, which requires allocating overhead costs across meetings. If the operator does not track gross revenue by individual meeting, the calculation is impossible to perform accurately. The regulation implicitly requires that level of record keeping.

Fifth, the betting exchange levy under regulation 7 uses a flat percentage of gross revenue after the threshold, not turnover. This is a radical departure from the rest of the regime. An operator with high turnover but low gross revenue (i.e., high payouts to customers) may pay a low levy, while an operator with lower turnover but high net commission may pay more. The 31.8% figure approximates 22.7% of gross revenue for premium meetings under reg 6, but it applies uniformly regardless of meeting type. This creates a cross-subsidy or distortion.

Sixth, the definition of “premium race meeting” for harness meetings changed on 1 August 2018 from $50,000 stakes to $30,000 stakes. An operator must know whether a harness meeting occurred before or after that date to correctly classify it. For a meeting that straddles that date (unlikely, but possible for multi-day meetings), the operator may need to apportion bets.

Seventh, the premium thoroughbred racing season concept from regulation 3 now only applies to bets placed before 1 October 2014. Any operator still dealing with historical liabilities for that period must apply the higher rate (2% of turnover) to thoroughbred bets placed during November to January. This might be overlooked in legacy audits.

Eighth, the regulations do not apportion bets between race meetings if a bet is placed before the meeting classification is known (e.g., futures bets on a spring carnival race that later becomes premium). Operators must classify the meeting as it eventually occurs, leading to potential retrospective adjustments.

Compliance requires a systematic approach to data collection and calculation. The operator should first determine which regulatory period each bet falls into. For current betting (after May 2021), bets are subject to either regulation 6 (for pari-mutuel and non-exchange fixed odds) or regulation 7 (for betting exchange). Bets placed before May 2021 but after August 2018 fall under regulation 6 for all bet types. Bets placed before August 2018 but after October 2014 fall under regulation 5, and so on. Historical periods require their own calculations.

For each current month, the operator must:

1. Classify every WA race meeting that occurs in that month as premium or standard using the stakes thresholds in regulation 3. Obtain stakes data from the racing controlling body (Racing and Wagering Western Australia or the relevant club). For thoroughbred meetings, the threshold is $100,000. For harness meetings after 1 August 2018, $30,000; before that, $50,000. For greyhound meetings, $30,000.

2. Separate turnover and gross revenue by bet type and by meeting. Record total turnover for all bets on WA races for the month. Also record for each meeting the turnover and gross revenue for pari-mutuel bets, non-exchange fixed odds bets, and betting exchange bets (if after May 2021, exchange bets go to reg 7). If the operator does not have per-meeting gross revenue, they must develop a method to allocate revenue from bets placed on the meeting.

3. Calculate cumulative turnover from the start of the current racing year (1 August). If cumulative turnover is below $3,000,000, apply the base rate: 1% of total monthly turnover for all bet types (except exchange bets, which also have a base rate of 1% under reg 7(2)). If cumulative turnover reaches or exceeds $3,000,000 in the current month, apply the post-threshold rates.

4. For the post-threshold calculation under regulation 6:

   • For pari-mutuel bets: 2.5% of turnover for premium meetings, 2% for standard meetings.
   • For betting exchange bets (if before May 2021): 2.5% of turnover for premium, 1.5% for standard.
   • For non-exchange fixed odds bets: compute the race meeting amount for each premium meeting as the greater of 22.7% of gross revenue or 2.5% of turnover. For each standard meeting, the greater of 13.6% of gross revenue or 2% of turnover. Aggregate these amounts across all meetings in the month. This aggregated amount is the levy payable for non-exchange fixed odds bets for that month.

5. For the post-threshold calculation under regulation 7 (betting exchange bets from May 2021): levy is 31.8% of total monthly gross revenue from exchange bets on WA races. No meeting-by-meeting breakdown is required; the rate is uniform.

6. Apply the de minimis check: if total monthly turnover from all WA racing bets is below $1,000, no levy is payable for that month, regardless of the above calculations. This is a complete exemption, not a deduction.

7. Sum the levy amounts from each category plus any pari-mutuel and exchange amounts (if applicable) to obtain the total monthly levy payable. The operator must remit this amount to the WA regulator within the time frame prescribed under the Betting Control Act.

8. Maintain records of each month’s data, including cumulative turnover calculations, meeting classification evidence, and per-meeting gross revenue calculations. The burden of proof in any audit will fall on the operator.

For historical periods, operators should reconstruct similar data for each month since September 2008, using the regulation applicable at the time. The 2012 and 2013 regimes included options (e.g., the greater of 20% of gross revenue or 0.2% of turnover) that may require re-computing historical liabilities. The operator should consult the amendment history and ensure they applied the correct formula for each month. Legal advice may be prudent given the complexities of the transitional provisions.