In late July 2011, Sportsbet Pty Ltd (Sportsbet) and International All Sports Limited (IAS) obtained Federal Court orders setting aside Notices of Assessment issued by the Australian Commissioner of Taxation.1

Online wagering, totalisator and lottery operators with overseas customers have the potential to seek substantial refunds for GST overpayments on the same basis.


At issue was whether, when determining the GST liability of an Australian gambling business, prize monies paid to overseas-based customers of that operator were to be included in the calculation of "total monetary prizes" paid out by that operator. The Commissioner's view was these amounts were not to be included.

This issue arose as GST was payable only in relation to the net amount collected by the operator (which was calculated after deducting the total winnings paid to customers from the total amount received in wagers). It was agreed that amounts to be excluded from the total amount received were wagers received from overseas customers (as they were treated as GST free supplies).

The Federal Court determined that prize monies paid to overseas customers should be included in the "total monetary prizes" calculation. His Honour Justice Jessup determined that there was no justification for the Court to depart from "...the ordinary meaning conveyed by the text of the definition of 'total monetary prizes'".2 "Total monetary prizes" means the total of all prizes, whether or not they related to GST-free supplies. Therefore, Sportsbet and IAS were entitled to have their net amount reassessed and to a refund of any overpayment of the net amount.


The decision (which is not being appealed by the Commissioner) will result in not only both IAS and Sportsbet receiving significant multimillion dollar refunds, but also other online wagering, tote and lottery operators being entitled to claim refunds on the same basis. In this regard, we note that Centrebet has announced, in the context of its acquisition by Sportingbet, that the Commissioner has indicated that he does not propose to argue the issues which are the basis of Centrebet's proceedings to recover a $90.7 million GST refund on a similar basis.

It is probable that other parties will seek refund claims on a similar basis. However, we note that this exclusion is no longer available in respect of future wagering activity.


1 Ibid. at 52.

2 International All Sports Limited v Commissioner of Taxation & Sportsbet Pty Ltd v Commissioner of Taxation [2011] FCA 824 (26 July 2011)

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