Tatts Group says the Victorian government is charging them on poker machines they no longer operate. Source: AAP
GAMBLING firms Tatts Group and Tabcorp say the Victorian government is charging them an exorbitant levy on poker machines that they no longer operate.
Tatts said on Monday that it had received a letter from the Victorian Treasurer advising it that it must pay a health benefit levy of $42.6 million in respect of gaming operations conducted by Tatts in Victoria over the 2012/13 financial year.
Tabcorp has received a letter asking for $42.0 million. However, the racing industry will be charged 25 per cent of that because Tabcorp operated its gaming machines as a joint venture with the racing industry.
The health benefit levy was introduced by the Victorian government in July 2000 and applied to poker machines operated in Victoria, to help fund hospitals and charities.
But both Tatts and Tabcorp lost their duopoly to operate poker machines operated outside of Melbourne's Crown casino, on August 15, 2012.
Tatts and Tabcorp said that as a result of the expiry of their Victorian gaming operator's licence on August 15, their gaming operations in Victoria were limited to 46 days.
During this period, Tatts' gaming operations under the licence generated earnings before interest, tax and depreciation of about $29 million - much less than the amount of the levy sought by the Victorian government.
"Tatts strongly disputes the reasonableness of the determination made by the Treasurer and its legal sustainability," Tatts said in a statement on Monday.
The company said it would also rely on an indemnity granted by Victoria in 2009 in consideration of Tatts consenting to an extension of its licence (from April 14, 2012 to August 15, 2012).
"Tatts would like to think that a dialogue with the Victorian government will result in a common sense outcome in relation to this matter, however in the absence of this will take all steps necessary to protect its legal position," Tatts said.
Tabcorp said on Monday the amount that it had ben asked for was contrary to its expectations.
The company said the Victorian government's 2012/13 budget papers had included an amount in line with a pro rata calculation referable to 46 days of poker machine operations.
"The levy has not been applied pro rata and it does not reflect that Tabcorp ceased to operate gaming machines on August 15, 2012 when its gaming licence expired," Tabcorp said.
"Tabcorp is considering whether to commence legal proceedings to ensure the levy is applied on a pro rata basis."
A spokesperson for Victorian Treasurer Michael O'Brien was not immediately available for comment.
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