All bets placed in South Australia with Australian-based betting companies will now be liable for the tax, Treasurer Tom Koutsantonis said.
The tax will raise AU$9.2 million ($7 million) a year from companies based both in South Australia and in other state. Of the money raised annually, $500,000 will go towards the Australian Gamblers Rehabilitation Fund, Koutsantonis said.
A tax-free threshold of AU$150,000 per year is proposed for all betting companies.
The measure follows the publication of a report called Losing The Jackpot: South Australia’s Gambling Taxes, which called for gambling tax reform.
"The betting industry is rapidly changing and our tax regime needs to change with it. If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not in whichever jurisdiction their head office and servers happen to be located," Koutsantonis said.
The UK brought in a point of consumption gambling tax in 2014. In 2015, the High Court in England ruled that the Court of Justice of the European Union (CJEU) should decide whether or not this is compatible with EU law, after the Gibraltar Betting and Gaming Association argued that it restricts free movement of services under the Treaty on the Functioning of the European Union (TFEU). The CJEU has not yet ruled on the matter.