TSBA WELCOMES THE BEGINNING OF REFORMS IN SPORTS BETTING TAXATION

The Tanzanian Sports Betting Association (TSBA) welcomes the Government’s formal green light to commencing the much-anticipated changes in sports betting taxation, subsequent to passing of the amendments to the Gaming Act (Cap. 41).

The decision to introduce taxation of operators’ gross gaming revenue (GGR) and to abandon a harmful, counter-productive and non-functional taxation of stakes is an encouraging development. It is a first step and solid base for our future joint efforts in making sports betting in Tanzania sustainable, competitive and highly contributive to the growth of national economy.

We are optimistic that the Gaming Board will show unchanged ambition and commitment to introducing other crucial regulatory reforms that have been for years now a reality in vast majority of European and US states’ most advanced sports betting markets, including that of  the UK.

All the Industry’s stakeholders in Tanzania have by now become aware an effective and fair policy of sports betting taxation is not sustainable, neither for the operators nor to the state within a context where sports betting winnings continue to be taxed. With this de facto double taxation policy in effect, there is still little we can do about stopping an even bigger portion of customers migrating from Tanzanian into operators licensed elsewhere in Africa and Europe, where taxes on winnings have been abandoned long ago.

As licensed operators remain in constant risk of leaving the business due to a high tax burden, the state itself remains faced with a serious reduction in tax revenues, regardless of taxation method introduced. The June amendments to Gaming Tax, aimed at a legitimate cause of consolidating the country’s fiscal revenue, are thus in danger of producing the exact opposite effects. The historic examples of countries that implemented similar sports betting taxation methods confirm these findings.

Key global analysis agrees and emphasizes the existence of a direct link between the model of sports betting taxation and the level of public incomes for the state. The GGR taxation model with no additional taxation of winnings and at the rate of 10-20% is widely accepted throughout the world’s most successful sports betting markets. It is the only model that targets the exact and realistic value of operators’ effectuated revenue, ensures constant growth of income to the state budget, optimum consumer security and a stable business environment for operators.

The Association looks forward to remaining a constructive partner to the Government in achieving an improved business climate in which the level of state public incomes is constantly raising, as this effort is fully in line with the country’s strategy for a strengthened tax enforcement policy, improved employment rates and highly-growing digital economy.