How GST applies to gambling sales you make
Gambling sales are taxable, but you only apply GST to your margin – not to individual gambling sales.
To work out your margin:
- work out the total amount you received in gambling event wagers for the tax period
- subtract the total monetary prizes you paid for the tax period.
If the total wagered amount you received is more than the total amount of monetary prizes you paid, you must pay GST on one-eleventh of this margin.
Ronnie, a bookmaker, receives $86,000 in bets at the races and pays out $20,000 in cash prizes in one tax period. The margin on Ronnie's sales for GST purposes is $66,000 ($86,000 - $20,000).
Ronnie must pay $6,000 GST ($66,000 x 1/11) on his gambling sales for this tax period.
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You must be registered for GST if your GST turnover is $75,000 or more, or $150,000 or more for non-profit organisations.
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Working out your margin
When you work out your margin, you may need to know about the following:
You do not include the value of non-monetary prizes, such as a car, when you work out your margin. You can only deduct monetary prizes from the total amount wagered.
Helpfund, a GST registered business, raffles a car and collects $44,000 from ticket sales. As the car is not a monetary prize, the margin for the sale would be $44,000. Helpfund will need to pay $4,000 GST ($44,000 x 1/11) to us.
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If you receive a monetary donation that you use as a prize in a raffle or competition, you include the value of the prize in your margin.
If you receive a non-monetary donation that you use as a prize in a raffle or competition, you do not include the value of the prize in you margin.
Unclaimed monetary prizes and bet refunds
The margin is not changed if gambling supplies are made and unclaimed monetary prizes or refunds of a bet become the venue's property under the rules or legislation that govern the gambling activity.
Lucky member draws
Monetary payments given as prizes in lucky member draws are included in monetary prizes when calculating the margin on gambling supplies.
If goods or services are provided as a prize you cannot include the value of the goods or services when calculating the margin, however you can claim a GST credit for the GST charged by the supplier provided you hold a valid tax invoice.
Monetary payments given as loyalty awards are included in monetary prizes when calculating the margin on gambling supplies.
If goods or services are provided as loyalty awards you cannot include the value of the goods or services when calculating the margin, however you can claim a GST credit for the GST charged by the supplier provided you hold a valid tax invoice.
No GST is payable if loyalty rewards, such as points, are exchanged or redeemed for food or beverage items supplied for no consideration.
Gift vouchers issued as prizes
The GST implications of awarding a gift voucher as a prize depends on the type of voucher.
You can claim a GST credit when GST is payable on the purchase of the voucher provided you hold a valid tax invoice.
You cannot claim a GST credit for a stated monetary gift voucher if no GST was payable on the purchase of the voucher. The voucher is not a monetary prize and is not included in calculating the margin on gambling supplies.
Free meals and beverages
When ‘free’ meals and beverages are provided, such as ‘buy one meal, get another meal of equal or lesser value free’, the GST payable is calculated on the consideration actually received for providing the meal or beverage.
If an external caterer operates at your premises the GST rules will vary depending on your arrangement with them. In most cases if the external caterer provides you with a tax invoice you will be able to claim any GST charged as a GST credit.
The following examples apply where you operate your own catering facilities:
Free tea, coffee and biscuits are provided to patrons. No GST is payable on the provision of these complimentary goods.
Two roast dinners are sold for the price of one and the normal price is $16.50 per dinner. The patron pays $16.50 and receives two dinners. GST payable on the sale of the two dinners is $1.50 (that is, $16.50 x 1/11).
A patron purchases a single roast dinner and presents a membership card which entitles them to a 10% discount. After applying the discount the patron is charged $14.85. GST payable on the sale of the dinner is $1.35 (that is, $14.85 x 1/11).
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