Australian government has been called for by a country’s welfare group to change laws surrounding online gambling in Australia to ensure that taxes are paid where bets are placed.

The South Australian Council of Social Services has said the Northern Territory and Norfolk Island regions are potentially being used to avoid tax as the laws state that companies are charged in the jurisdiction where they are based, rather than where a bet is placed.

Chief executive of the welfare group Ross Womersley said the current legal system means the state is missing out on tax income, calling for the government to change laws to instead tax companies where bets are placed.

Womersley said: “When a gambling corporation does not have to be incorporated or resident in a jurisdiction, but can still use the licence of a jurisdiction like Norfolk Island to lessen their taxes, I think we have gone beyond real business and are talking about virtual tax havens and (legal) tax avoidance.

“Because of the way the licence arrangements are made, South Australia is missing out on a whole lot of tax income.

“Given that the gambling industry generates a high level of problems, major issues in our community, we think that it’s absolutely important that the industry meets its social responsibilities in the form of taxation.”