Trinidad and Tobago sportsbooks taxes

Tale as old as time: Trinidad and Tobago’s government says sports books are underpaying, while local businesses say taxes hurt their profits.

An ongoing dispute between Trinidad and Tobago’s government and betting shops regarding tax percentages stems from what business owners claim is “hurting racing” by making punters angry and causing a significant decline in wagers being placed. The island nation that sits north of Venezuela and south of Grenada in the Lesser Antilles is facing the classic battle of what the government wants versus what the actual market will  bear.

Taxing Face Off

One local business owner on the tourist destination – Peter George, owner of Fairchance Racing Service in Port of Spain, the island’s capital city – says his own business is now closed because of the tax issues, resulting in 300 people losing their jobs. George claims his business has been siphoned so badly over the course of the past three years with the 10 percent tax levy on every horse racing bet, that he simply decided to shut down.

“We have lost in the last two to three years 40 per cent of our volume. We are hoping the government gets our attention and calls us and says what is the problem and what can we do to assist,” George said.

“The existing legislation is not workable, it is obsolete and no good to the racing fraternity. The Betting Levy Board (BLB) is requesting more and more taxes from the pools and this is burdensome,” explained George, whose betting shop is located on Queen Street. “We even get threats from the BLB, but the long and short of it is we cannot pay more than we are collecting.

“Everyone knows we need to have this legislation changed immediately,” George added. “The racing pools are not making the money they used to make in years gone by and in the last decade we have seen the closure of at least ten pools. We cannot go on with the 10 percent turnover tax. It is hurting racing.”

George says that because customers must fork over the that tax directly at the time a bet is placed – then leaving the betting shops responsible for turning those in to the State – that it has had a “punitive” effect of driving customers away more and more in the decade since it was first implemented. He added that as more options have been introduced over the past 10 years for alternative ways to place bets that don’t cost customers that tax, they have simply taken their business elsewhere, including to unregulated – and thus “tax-free” – underground bookmaking operators.

These operators have become brazen enough to go right to the source, looking for new customers, George added.

“They are coming into our establishment and soliciting our clients with the no tax initiative. We want the betting shops to survive and the illegal move of refunding the punters turnover tax must stop. It is illegal.

“[The customer] has the ability to do online betting, calling anywhere in the world and get a tax-free bet, [so] there is no reason for him to pay 10 percent tax on a bet,” the frustrated betting shop owner noted. “Nowhere in the world is there a turnover tax. [Only] in the Caribbean, Jamaica, Barbados or Guyana does such a  tax exist. This is impacting negatively on the industry.”

Needless to say, George is not alone in his displeasure over the disincentivizing levy; the Bookmakers Association in that region is pushing for a flat annual licensing fee to replace it.

Apparently underground operators aren’t the only threat to Trinidad and Tobago’s local sportsbooks; George noted that since 2011, betting volume in the outlets has dropped by as much as 40 percent due largely to competition from area casinos, who lure punters with their slot machines.

“They have free drinks and free food to entice the punter and he can sit and play the slots all day,” explained George. “For the industry to survive we need to meet with the government and work out something which is amicable to all and will ensure that many more workers will be employed and not sent home.”

In 2012, the now-former chairman of the Betting Levy Board, Kama Maharaj, claimed the sports book industry actually took in billions, but had only paid out some $15 million in taxes. Maharaj said that figure should have been closer to $100 million.

Looks like somewhat of a standoff on the OK Corral for now, but for George, the decision now rests firmly with changing the existing legislation to be friendlier to his business.

“The ball is now in the government’s court,” he said.