Tatts, Tabcorp could face $85 million in pokies levies after government appeal allowed

Victoria’s Supreme Court has upheld an appeal by the state government over a disputed payment of $84.6 million in levies from gaming operators Tatts Group and Tabcorp Holdings.

In a judgment handed down on Tuesday, Judges Maxwell, Beach and McMillan said they disagreed with a previous finding that Victorian Treasurer Michael O’Brien’s imposition of the health benefit levy on the two companies was “unfair and unreasonable”.

Tatts and Tabcorp were notified of levies of $42.6 million and $42 million respectively for 2012-13 at the beginning of May 2013. The levy was collected from poker machine operators and used to fund charitable and healthcare facilities.

The amount was greater than both companies had expected, given they had stopped operating the state's poker machines on August 16, 2012 when the licences were transferred to pubs and clubs. The companies argued they should have been charged levies that were calculated on the basis that they had operated poker machines in Victoria for just 46 days. For Tatts this would have led to a levy of $7 million instead.

Mr O’Brien had argued there was no legal discretion for him to calculate the liability on a pro-rata basis. In June 2013 the court found this was incorrect, but on Tuesday the three judges found that the “statutory language permits no other interpretation”.

"The Treasurer was bound to determine the tax payable in accordance with the prescribed formula,” they said. “Any unfairness which might be thought to have resulted was the inescapable consequence of the provision as enacted.”

The companies have previously said they would defend any appeal, but could not be reached for comment.

The finding comes one week after the Supreme Court found Tatts was entitled to $451 million in compensation from the government over the loss of the pokies licence.

However, a similar $687 million claim by Tabcorp was denied.

This article has been corrected to make clear that the court ruled in favour of the Victorian government's appeal.

The story Tatts, Tabcorp could face $85 million in pokies levies after government appeal allowed first appeared on The Sydney Morning Herald.

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