Few countries rely more heavily upon gambling as a source of revenue than Australia, and this reliance has grown in recent years in the wake of the growing popularity of gambling in that country. As a percentage of states’ own-source revenue, gambling taxes increased from 7.9 per cent in 1985/86 to 11.2 per cent in 1995/96 (Productivity Commission, 1999, p. 19.7). With legalized lotteries, poker machines, and horse racing all dating from before the Great Depression, Australia features a variety of well-established forms of commercial gambling subject to taxation (Productivity Commission, 1999, pp. 2.1–2.5). In fact, the taxes on gambling in Australia illustrate well a theme of the present chapter, that the structure of gambling taxation is quite complex. Not only do the forms of taxation differ by type of game, but also the tax rates and often the forms differ across states, which are the principal level of government that imposes these taxes. The rates are often differentiated according to the type of operator. And some states return part of the revenues from some taxes to the gambling industry.