As the Government junked its promise to reform gambling ads before the Election, Michael West looks at the two faces of Sportsbet.
This article is the third in the Michael West Media multinational tax dodging series for 2025. Janus, the two-headed Roman God is the patron of this series.
Janus could see forwards and backwards and inside and outside using his two heads. The practices of this ‘Roman god of doorways and transitions’ are worshipped by the multinational tax fraternity in Australia which strives to give information to the Tax Office with one head while the other head gives exactly the opposite information to the Federal Parliament and the public.
Our first article, Foxtel: transactions you can’t trust, tax evasion you can’t ignore, revealed that Foxtel generated $14B income over 5 years with zero income tax paid.
With one head, the Janus-faced Foxtel broadcasters of Sky News are demonise welfare bludgers. With the other head, Foxtel revels in corporate welfare bludging itself by cheating Australia’s tax base.
Our second article, News Corp lies to Parliament in lobbying putsch to change media laws exposed the activities of Foxtel’s other head which tells the Government, straight-faced, how they pay income tax while Netflix does not.
Our third article here is about Irish bookmaker Sportsbet whose one head goes out to $9,000 lunches with Communications Minister Michelle Rowland while its other head is busy depleting the bank accounts of its customers.
The Sportsbet business model relies on the chance that their customer base is always about to lose. On average, Sportsbet’s business causes its customers to experience financial losses. Sportsbet claims that losing money is a source of entertainment for these people.
With one head, Sportsbet’s website proffers a commitment to safer gambling. With another head, Sportsbet promotes the notion that problem gambling is fun. A recent class action against Janus-Sportsbet alleges that it actively promoted an illegal live betting service resulting in millions of dollars of losses to customers.
A $600m black hole
Sportsbet also has form with its Tax Office storytelling because $600m of the company’s wagering income is mysteriously absent from its tax returns.
Sportsbet reports its net wagering income to the ATO. But Janus-like, it reports much lower net wagering income to the ATO than the income (revenue) that it discloses to the Australian Securities and Investments Commission (ASIC).
How much lower is the net wagering income reported to the ATO? Based on MWM calculations there is an income deficit of $0.6 billion over the 5-year period 2019 to 2023. That’s half a billion in net wagering income that seems to have gone missing from Sportsbet’s filings with the ATO.
The table below shows the numbers.
There are plausible reasons why total income reported to the ATO might differ from revenue reported to ASIC. These reasons do not appear sufficient to explain the $0.6 billion deficit.
The deficit is $1.4B before GST because GST is not included in total income reported to the ATO but it is included in revenue.
With one head, Janus-faced Sportsbet recognises revenue gross with the GST included. With another head, Sportsbet declares in its statutory financial reports that it complies Australian Accounting Standards including this one: “Revenues . . shall be recognised net of the amount of goods and services tax (GST)”.
Net of fishing nets
Perhaps Sportsbet’s audit firm, KPMG, might explain Sportsbet’s duplicity or maybe they just need to do some extra training on the meaning of “net of the GST”.
The word “net” as used in accounting standards is not like a fishing net. It doesn’t mean include it, or catch it in the net and drag it in. Net of the GST means not including the GST.
Another reason for the deficit might be that Sportsbet recognises revenue for outstanding bets whereas total income reported to the ATO is limited to realised bets, that is, realised gains and losses from betting activities.
Outstanding bets on December 31 (Sportsbet’s financial year-end) could include bets on which football club will win the Premier League title in the United Kingdom, which is usually determined in May each year.
Outstanding bets become realised bets when the gambled-on event has occurred. A deficit of $0.6B is highly unlikely to be explained by outstanding bets. This is because over a five-year period, outstanding bets should wash out to a significant extent.
So, the question remains, why is there a $0.6B deficit in the income that Sportsbet reports to the ATO when compared to the income it reports to ASIC?
Sportsbet’s latest marketing campaign champions the AI that customers can use to make bets. AI being referred to here as the “actual intelligence” of other punters (including punters that lose) rather than artificial intelligence. We are encouraged to bet with Brad, even if Brad might be the biggest loser of all time.
AI is Artificial Income
When it comes to Sportsbet’s tax affairs though AI would be better described as “artificial income”.
Has anyone at the ATO cast a sceptical eye over Janus-faced Sportsbet’s income or are staff too busy preparing briefs of evidence to prosecute whistleblower Richard Boyle?
ATO and ASIC formguide
Check out the form guide ATO and ASIC!
Start with the Parliamentary Report of June 2023 entitled You win some, you lose more which finds that:
- Sportsbet is grooming children and young adults to gamble.
- Sportsbet is wreaking havoc in Australian communities with saturation advertising.
- Sportsbet has a business model of shunning winners and targeting gamblers that lose.
Next is Sportsbet’s accounting practices including:
- Revenues gross including GST.
- Cost of sales gross including GST.
- Nondescript items in the statement of cash flows.
- Fantastical goodwill recognised to inflate share capital.
And perhaps the biggest red flag of all: Sportsbet has a propensity to stroke the egos of Labor party heavyweights for commercial advantage. Janus-faced Sportsbet likes to offer lavish meals of praise to heavyweights like Prime Minister Anthony Albanese and Birthday Girl Communications Minister Michelle Rowland under the guise of engagement.
These meals are equivalent to giving bonus bets to politicians. But not only do the politicians get fed, the media companies which rely on gambling advertising get fatter too.
Here at MWM, we would prefer to honour the late Labor party member for Dunkley, Peta Murphy; a Labor party stalwart. She was the driving force behind the Parliamentary Report of June 2023 which espoused reform to gambling advertising.
Peta Murphy would be horrified that more than 18 months after the release of her Report, the Labor government is yet to respond to it. Now, it has been shelved till after the Election.
Should the ATO and ASIC trust what Janus-faced Sportsbet has been telling them about their income? Based on the actual intelligence in this article, Brad says no.
Sportbet doesn’t just groom children with gambling ads, it grooms regulators too
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.