This Should Just About Finish Off Horse Racing In SA.........

I picked up this article today whilst reading reviews & comments on Wednesday's Budget speech:

The introduction of a "gambling levy", to mitigate the negative effects of excessive gambling, was once again proposed in Finance Minister Tito Mboweni's in his 2019 Budget speech.

"We are reminded of the sugar tax that took effect on 1 April last year leaving a bitter taste in the mouths of industry. This tax was also introduced for philanthropic reasons due to the impact sugar has on chronic diseases such as diabetes and obesity," commented Nicole Erlank, a tax consultant at Mazars.

"In reality, producers of soft-drinks reduced their bottle sizes with no reduction in price to negate the effects on consumer spending. As a result, this tax exceeded revenue generation expectations, and there is little evidence to suggest that the tax had any progressive impact on public health."

Regarding a proposed "gambling levy", Mishka Fledermaus, also a tax expert at Mazars, said that, as far back as the 2011 Budget, Cabinet proposed a 15% withholding tax on gambling winnings, which was later amended in 2012 to a 1% levy on gross gambling revenue of the casino.

"There was no real traction since this announcement was made, however, the minister has confirmed that the national gambling levy proposition with regards to the 1% levy is indeed still alive and well," said Erlank.

"One wonders what will be done with the levy and where South Africans will see this money going. How successful will government be in utilising these collections for gambling awareness and rehabilitation as proposed?"

In addition, the practicality of the implementation of the levy should be considered, believe Erlank and Fledermaus.

"The levy will most definitely create an additional compliance and financial burden on the gambling industry," said Fledermaus.

"It seems we will need to wait with bated breath for the release of the draft legislation due to be published for comment later this year."

My Thoughts :

We already have a tote which sees nothing wrong in offering bets with a NIL dividend on winning tickets. Last week I even saw a win bet that paid R1. Nice. An additional levy could simply increase the number of NIL dividends through a combination of take outs and new taxes.

The government isn't interested in 'problem gamblers'. It just wants more revenue whilst conveniently overlooking the reality that most people gamble with money that has already been taxed.

The problem with our government is that they don't understand the relationship between fair taxation and compliance. They simply believe that the earners must support the 'werkers' (sic) through endless, ever rising taxation. I would like to wager that the vast majority of parliamentary representatives wouldn't pass a multiple choice questionnaire on basic economics if asked to do so........and they are the ones voting in legislation on matters way beyond their pay grades.

A good example of excessive taxation is to be found in the cigarette smuggling trade. Smokers want cheaper smokes and the illegal trade therefore flourishes as 'legitimate' cigarettes now cost more than the smoker IS PREPARED TO PAY. Who knows how much is now being wasted on law enforcement pursuant to this trade? Probably a lot more than they are recovering.

Precisely the same will happen with income tax if they crank it any higher. Skilled people will simply leave because they possess the mobility that poor people don't.

But the best is the fuel levy! The state uses petrol like an ATM. In the next 12 months we can expect a global explosion in the popularity of the EV (electric vehicle) to which South Africa will not be immune. Yet we cannot even keep the lights on let alone make provision for the huge demands that EVs will make on our grid.

We already pay a 6% levy?


I`m still old enough to remember the 10% Tax in the UK

You could pay it either before hand on your stake or afterwards on your winnings

Cheers again Garrick and the EV situation in laughable.
Sadly you could probably leave the words "Horse Racing " out of your headline statement.

Bob Brogan wrote: We already pay a 6% levy?


I`m still old enough to remember the 10% Tax in the UK

You could pay it either before hand on your stake or afterwards on your winnings

Bob - So did we. In the early 90's they cranked betting tax to 12%. A R1000 winning bet, therefore, returned the punter R880 + stake.
I remember this well because I was clerking for a bookmaker on Saturdays.
How did this work out?
Initially we moved all 'good clients' off the book. So we effectively became a bucket shop. The clients loved it because they stopped paying betting tax altogether.
Soon even bigger cash clients were asking for relief.
Tax returns plummeted.
The authorities quickly woke up and smelled the coffee. The betting tax was reduced to 6% and revenue from that source increased about eigthfold.

When on track at Musselburgh Bob my even shots were paid in full no tax.
Plus you correct Garrick big bets for the big punters were logged eg an even 1000/1000 to and even 100/100 on the books and the harder they push on higher taxes the bigger the old bucket shops will increase .

De Jager wrote: R1 a win, 50c a place and it gets beat.....who is stupid enough to bet on these horses on the tote???

Punters..... operator scores!

The tragedy of this type of outcome is that the punter does not know what the 'dividend' will be when placing the bet.Which is why the 'mind game' punter (as opposed to the 'lucky dip' punter ) will mostly use fixed odds providers when striking win and place bets.

It's easy to write it off to 'punter stupidity' when surely the tote has a duty to market an ethical product which offers, at the very least, some sort of actual 'profit' on a winning bet. Alternatively DO NOT offer the bet under circumstances (ie very small fields) where this outcome is likely.

Of course - what the tote management is either too lazy or too inept to do is REDUCE the takeout in smaller fields. Modern technology should make this easy to do.

Yet tote management simply plods on with an offering desperately in need of a makeover in the folorn hope that it will suddenly 'come right'.

As I have stated many times before : Punters act in their own interests. It is NOT the punters' responsibility to charitably fund racing as their first priority. They wish to make money and if that, coincidentally, happens to benefit racing then well and good.

But I have yet to meet a punter at a tote window who tells me : 'I'm having a R1000 bet on horse X. I am happy with a takeout which reduces my winning bet to just R 1000 as long as racing prospers and Larry gets his R3 million a year'. Yeah, right.