DIGICEL PNG MOBILE PHONE LOTTERY - FINDINGS FROM TAX REVIEW

Commentary by  Kessy Sawan 

Lotteries are the most widespread form of commercial gambling in the world. Lotteries offer several main products, which differ in probability of winning, prize structure, and frequency of drawing and the sense of player participation.

Under the Gaming Control Act (GCA), the National Gaming Control Board (NGCB) may grant a license to operate an authorized lottery in PNG. PNG Gold Lotto used to provide the instant or scratch-off ticket with thin covering that, once scratched off, revealed what prize if any the purchaser has won. However, due to accountability and transparency issues it has been closed.

NGCB granted a license to PNG Lotto Limited to provide lottery gambling in the country. Since 2012 the Government has allowed the introduction of a new lottery, this time on mobile phones. PNG Lotto Ltd has engaged Digicel mobile phone service provider to conduct its SMS mobile lottery. Each SMS costs around 49t which may make it particularly attractive to people on low incomes seeking to benefit from the chances of winning big.

The GCA provides for betting tax on lotteries to be defined via regulation. Currently there is no regulation imposing tax on the mobile phones lottery. Since its operation in 2012, there has been no regulation, tax nor charge imposed on this Digicel Mobile phone lottery.

There is no data available on the social effects of this form of gambling, particularly as it relates to underage use and/or abuse of the gaming or lottery feature on mobile phones. Consultations revealed widespread underage gambling.

The Tax Review identified this to a “significant” oversight by the Government and the NGCB and recommended regulations to be put in place and taxing arrangements to be implemented for mobile phone lotteries as soon as practical.

The Government did not consider this recommendation in its 2016 Budget. I hope it does in the 2017 Budget.