Australian Government to Exclude Gambling from R&D Tax Incentives
The Australian government has announced a policy change that will exclude gambling activities from eligibility for the Research and Development (R&D) Tax Incentive. This amendment, outlined in the Mid-Year Economic and Fiscal Outlook, will take effect on 1 July 2025. Tobacco-related activities will also face exclusion.
R&D Tax Incentive Overview
The R&D Tax Incentive offers tax offsets to companies undertaking eligible research and development activities, aiming to encourage business innovation and growth. However, the government stated that activities associated with gambling and tobacco would no longer qualify due to their potential to “exacerbate addiction and associated harms” and increase health risks, respectively.
The government clarified that initiatives aimed at harm reduction, such as addiction treatment research, will remain eligible for support. This policy shift is projected to generate AU$12 million in additional receipts and reduce payments by AU$8 million over the next five years, starting in 2023–24.
Legislative Steps and Program Oversight
Legislative approval is required to enact these changes. Until then, the Department of Industry, Science and Resources and the Australian Taxation Office will continue managing the program under the existing guidelines.
Industry Criticism: Responsible Wagering Australia Responds
The decision has drawn criticism from Responsible Wagering Australia (RWA), which warned of potential risks to Australian jobs, innovation, and investment.
Kai Cantwell, CEO of RWA, expressed concerns over the precedent this exclusion could set, describing the decision as a shift away from sector neutrality in tax policy:
“The government’s announcement sets a dangerous precedent for how tax policy could be misused in the future. Today it is gambling companies, but any industry could be next if it’s used as a bargaining chip or horse-traded in future political deals.”
Cantwell also warned that the exclusion might push R&D jobs to other countries with more supportive tax policies, ultimately harming Australia’s economy.
Calls for Reconsideration
Cantwell urged the government to engage with gambling industry stakeholders to find collaborative solutions that balance consumer protection and economic growth.
“We will continue to invest in consumer protections, with or without government support. Australian technology and innovation are world-leading, driving local growth and being adopted by global companies.”
The government has not yet responded to these calls for consultation or reconsideration.
