GST and common betting activities
Bet-backs or lay-offs
Bets you place to spread the risk of a loss on an event are called bet-backs or lay-offs. Bet-backs are treated the same way as other gambling sales.
If you receive a bet-back, you:
- treat the bet the same way as other gambling sales
- include the bet in your calculation of GST on your total amounts wagered
- include any winnings you pay out in your calculation of GST on the total monetary prizes you pay.
If you make the bet-back, you:
- do not include it in your calculation of GST on the total wagered amount you receive
- do not need to account for GST on your net winnings
- cannot claim a GST credit on the bet.
Gambling sales you make to gamblers who are outside Australia are GST-free exports. This means that you do not include the wagers you receive from gamblers outside Australia when you work out the GST on your margin. Any monetary prizes you pay to those recipients are also excluded from the calculation.
You must keep records to establish that the gambling sale is GST-free. As a minimum, you must record an overseas residential address and contact details for each gambling sale you make to someone outside of Australia.
If you are registered for GST and operate gaming machines, you make gambling supplies. When you make gambling supplies in a tax period, GST is payable on the margin of gambling supplies rather than each individual gambling transaction.
Reporting contributions to linked or cross-venue jackpots
Gaming machines may be linked across venues to provide opportunities to play for larger jackpots. Participating venues contribute to a ‘jackpot fund’ administered by an operator. If a larger jackpot is won on a linked machine, the payment to the winner is made by the operator out of the fund rather than by the entity.
You include the ‘jackpot fund’ contribution paid to the operator as a monetary prize when calculating the margin on gambling supplies. Do not include any prize money payments made by the operator.
You can claim a GST credit for the GST charged on the operator’s administration fee provided you hold a valid tax invoice. The operator should not charge GST on the ‘jackpot fund’ contribution.