Free bets are a popular incentive offered by sportsbooks that involves a so-called cash return whenever a bettor loses a bet. Different companies offer a variety of those bets and some of the most popular involve a matching amount of “return” upon losing a bet. For example, if a bettor places $100 and loses, the betting company would give the bettor $100 in credit.
While this sounds quite good, in reality, the credit or “cashback” comes under conditions, which means that the bettor can only wager this money and not withdraw them. Now, according to a new report, Queensland may be putting an end to the free bets practice under new regulations.
New Regulation in Queensland Impacts Free Bets
The popular and lucrative “free bets” and “credits” that sportsbooks give their customers may no longer appear a lot in Queensland, judging by a recent report by ABC News. This is because new laws in Queensland slightly change the definition of those promotional offers and the taxation itself. Previously, the tax was calculated for the sportsbooks’ taxable wagering revenue excluding the money paid out back to customers.
In other words, the operators were giving back money to customers as free bets or bonus offers that weren’t taxed, but in the end, many of those bettors would wager the money and the amounts returned to the operator.
This will no longer be the case, as such offers will be taxed as money received by the sportsbook. Additionally, the new regulations increase the tax rate. Currently, the tax rate for sportsbooks is 15% and it increases to 20% under the new rules. What’s more, the new regulation seeks to increase the wagering tax revenue allocated to Racing Queensland from 35% to 80%.
“A bet made wholly or partly using an amount that is provided to the person making the bet by the betting operator with whom the bet is made and is not immediately redeemable by the person for cash,“
reads the new Queensland regulation for free bets
Changes May Reduce the Incentives Offered by Sportsbooks
Considering the updated regulations for sports betting in Queensland, operators may decide to reduce their promotions in the state. This will likely bring less attractive or no promotions for Queensland races. What’s more, the legal changes may also bring less attractive odds.
On the other hand, sportsbooks may decide to exclude Queensland races altogether from their promotions by simply introducing an asterisk explaining that free bets or cash-back bonuses do not apply to the state. Whatever the case might be, the licensed sports betting operators will confirm how the changes in regulation will change their offers and what the end result will be for the consumers. Still, it is important to note that this tax change doesn’t apply to the consumers but to the operators.