Australia TV license fee cut to neutralize gambling ad revenue

The prospect of a dramatic cut to the $100 million-plus television ­licence fees has increased as it emerges that powerful independent crossbencher Nick Xenophon will meet with the Turnbull government in coming weeks to propose an offset to gambling ­advertising restrictions.

Senator Xenophon is planning to hold talks with the government in the first sitting week of parliament on August 30 to outline his proposal.

He will also hold meetings with the Seven, Nine and Ten ­networks as he seeks to curb ­gambling advertising on G-rated sporting events.

“I don’t think the networks should be out of pocket,” Mr Xenophon told The Australian yesterday. “They shouldn’t be bearing the brunt of this when it’s the government that has allowed it to proliferate.”

It is understood Mr Xenophon was expected to send letters this week seeking meetings with Communications Minister Mitch Fifield and the networks.

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TV gambling advertising is worth $120m a year, with about $100m going to the free-to-air networks. The networks collectively pay more than $100m in ­licence fees

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It is also one of the few TV advertising categories that is seeing growth, as the industry grapples with competition from digital ­giants Facebook, Google and YouTube.

Revenue lost as a result of ­proposed advertising restrictions would be offset by a cut to the ­networks’ licence fees, while the government could crack down on tax minimisation techniques allegedly used by international ­online bookmakers, including William Hill and Sportsbet, that are registered in the Northern Territory, Mr Xenophon said.

“The whole idea of the restriction is that kids wouldn’t be exposed to gambling advertising. Why should that exemption apply to sporting programs when we know it is a family activity?

“When eight and 10-year olds know more about the betting odds of a game than the game itself then you know this is huge ­problem. We should look at this in much the same way tobacco advertising was dealt with a generation ago.”

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A spokeswoman for Minister Fifield said: The government is aware of Senator Xenophon’s concerns and will work constructively with him and all of the crossbench members in the 45th parliament

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Free TV met earlier this month to discuss how it would tackle Mr Xenophon’s anticipated requests for gambling restrictions. One issue with Mr Xenophon’s proposal is that ­licence fees are not worth as much as gambling revenue if it is assumed the networks would be granted relief anyway.

The networks say they were told the government would deliver a “pathway” to full licence fee abolition because the tax was outdated, given it was implemented in the 1950s.

Seven West Media chief executive Tim Worner said ­greater regulation of free-to-air TV would drive advertising to unregulated platforms.

“Licence fee cuts are already critical for the future of broadcasters, even with the current rules in place,” he said.

“Increased levels of regulation like further gambling advertising restrictions will only cancel out the benefit to industry of getting licence fees to a sustainable level.”

Free TV chairman Harold Mitchell said the industry body would meet with the government.

Ten chief executive Paul Anderson said: “Continuing to target this industry when we are already by far the safest and most heavily regulated is neither effective nor sustainable.”