The New “Tote” Tax

Sun (Auckland), Volume IV, Issue 1036, 29 July 1930, Page 12

The New “Tote” Tax

Present Revenue Could Be Doubled If Government Took Right Steps

Forty years ago the Avondale Jockey Club distributed £495 in stake money. For the forthcoming season the stakes amount to £10,400, the same as for the racing year closing this week. Of course during the boom years the stakes of every club in the country soared to unexpected heights, the Avondale Jockey Club’s maximum effort being in the 1921-22 season, the figures that term reaching £16,700. Might Have Been Less Perhaps the Avondale Club was a bit unfortunate in having to draw up its 1930-31 programme so early, due to its spring race meeting—now less than a couple of months off —otherwise its executive might have been acting wisely if, instead of giving the same stakes as those distributed for the just-concluding season, it had decided on a reduction. The position of the country today is vastly different from what it was even a week | ago. In that short period the United Government has brought down drastic taxation proposals which, if carried into effect, must seriously affect racing clubs and the racegoing fraternity. For this reason racing clubs —and of course trotting clubs as well —will of necessity be forced to go very carefully into the question of finance when compiling their future programmes. What It Means Of late years racing clubs have been endeavouring to make the sport as cheap as possible, no doubt with a view to offsetting the loss of money through taxation to investors on the totalisator. The increased amusementtax is going to make it exceedingly difficult for clubs to keep going. The straight-out totalisator-tax is to bo doubled —from 2h per cent, to 5 per cent., taken from the total investments on each race. For instance, on the £BOO.OOO totalisator turnover at Ellerslie this season the Government’s share was £20,000. Next season, if the new taxation proposals come into force, those figures will bo doubled—£4o.ooo. And none of this money goes back to the investors. In addition, after this taxation, plus the club’s percentage, has also been deducted, tlio Treasury receives 5 per cent, on all dividends. Then on top of all this, there is a tax on the stake money. A Big Cut The investment figures on the last Auckland Clip provide an interesting means of comparison as indicating just bow much money was los£ to backers in this particular race—much the largest single betting race in the Dominion. Last Boxing Day the Cup investments amounted to £24,920. Of this amount the Government took £623 of the investments and a further £1,121 on the total available for dividends

after the club had taken its share—£l,B69, of which 90 per cent, must go back in stake money as laid down by the Rules of Racing. So that of the original £24,920 invested, only £21,307 went back to backers by way of dividends, less the fractions. Under the proposed increased taxation, the drag would have amounted to £4,205, leaving £20,715 to be circulated among the dividend collectors, or nearly one-sixth of the money invested. The only winners over the increased taxation upon investments will be the bookmakers, who will still take, the backer’s pound note and return totalisator odds (with a well-defined limit, of course). Now with the increased taxation the bookmaker will win another sixpence in the pound. But it will not bo found that the bookmakers add the amount of the deducted totalisator tax, which they do not have to pay, to their clients! No, they win all the way. Allowing for all these deductions, plus the fractions, bookmakers do not pay their clients more than a bare 16s to the pound The Remedy To knock the bookmaker out of business is obviously not the intention of the present Government, any more>4han it was the policy of its predecessors. It is estimated that in New Zealand the bookmakers handle as much money as is invested on the totalisator. Perhaps it is more. In other words, the amount put through the totalisator in the present season for race meetings alone, exceeding £5.000,000, should really have been £10,000,000 if the investments held by the bookmak- j ers had been diverted through the correct medium—the totalisator. Without the necessity of inflicting upon racegoers a further penalty by way of taxation, the Government could have doubled its revenue from racing and trotting by giving race patrons far afield the opportunity of telegraphing their investments to racing clubs. These patrons would thus be diverted from lawbreaking channels direct to the totalisator, with benefit to the whole of the racegoing community and to the country as a whole. Of course such a method would bring increased revenue to the Government not only from the totalisator, but also through the Telegraph Department. Chasing Business As previously remarked, racecourse patrons are to be burdened with additional stiff taxation, which should be unnecessary if the Government had sufficient backbone to play fair to racing clubs and racegoers and sponser a Gaming Act Amendment permitting the telegraphing of investments to racing and tritting clubs. Such a step would injure; nobody but the bookmakers and those living under the banner of Intolerence. —EARLY BIRD.