The South Australian government is reeling after figures show a drop of $10 million in this year’s gambling tax revenue as gamblers abandon pokies for online alternatives.

The migration from pub and club poker machines to online gambling sites that punters can use at their own leisure is clearly taking a chunk of tax revenue out of South Australia’s government finance pot. The lure of sites like PartyGaming, Captain Cooks Casino, PKR, Centrebet, Roxy Palace and Virgin have seen revenue from pokies drop from $750 million taken in the year up to the end of June 2009, to $729 million in this last financial year. This represents the lowest yearly spend on pokies for six years resulting in the state government’s tax revenue from gaming dropping from $292 million down to $282 million for the last year.

Online Gambling Tax Set to Rise in GibraltarAccording to experts, massive advertising campaigns in the media have been mainly responsible for the recent increase in Internet gambling’s popularity. Unfortunately, this form of gambling avoids the state’s tax regulations by funneling the revenue out of the country. To add to the government’s woes, pubs and clubs in the state have also suffered with a drop in revenue of $11 million. With bans on smoking in public places set to further reduce revenues as smokers take their business out of the bars and onto their own home computers, the future for the entertainment industry does not look too rosy.

Ian Horne, general manager for the Australian Hotels Association said that major pressure was being placed on the industry from both online gambling and sports betting outlets. He said that the market for sports betting has been expanding enormously. You only have to look at the options that were available for betting on the federal election, with betting odds being promoted with unprecedented vigour. Add to the problems of poker machines having been demonized while other types of gambling were considered to be socially acceptable and you can see why more and more people are going online to do their gambling.

On the other hand, according to Tom Koutsantonis, the Gambling Minister, the decline could also be attributed more simply to household expenditure on activities of a recreational nature being reduced. This could be due to a recent increase in interest rates made by the Reserve Bank over the past year.

The Government is still working towards reducing the number of poker machines in pubs and clubs by 3000, despite figures that show now there are seven more in use than there were last year.