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NSW government to renegotiate proposed gaming tax with casino operators

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Star Entertainment Group issued record-breaking fines
The recently-elected government of New South Wales has said it will consider renegotiating the proposed gaming tax its predecessors handed over due to how burdensome it will be for financially-struggling casino operator Star Entertainment. Recently embattled Star announced plans to cut 500 jobs, freeze salaries and incentives in an effort to save money on operating costs.

The previous administration, headed by Premier Dominic Perrottet, came up with the plan to increase gambling and poker machines taxes from 32% to 61% to clamp down on the two casino operators in the state while also getting extra revenue to add to its coffers. However this does not bode well for Star that is already in a precarious financial state due to regulatory sanctions and fines imposed on it after being found guilty of aiding money laundering and other illegal activities.

Currently, Star is experiencing a “significant and rapid deterioration” in operating conditions, prompting its management to engage with the states and regulators to discuss “casino duty rates and flexibility on payment terms in relation to any current and future penalties.” Star has already faced serious financial penalties, including separate $100m fines from Queensland and NSW last year, and has set aside $150m for other fines.

  • Star Sydney Works Voice Concern Over Tax Hike

    Furthermore, if the proposed casino tax were to be implemented, Star is looking at a loss of between $400 million and $1.6 billion just from its NSW business. This made it advise its shareholders not to expect any significant profit this year.

    The new premier, Chris Minns, has however come out to speak against the proposed tax policy as being unsustainable. He emphasized the need to assess the impact of the tax increase on employment, particularly in a highly skilled area like gaming and casinos.

    In addition, he said that while there would be discussions around the taxing arrangements, the size of the penalties would stand. He believes that severe financial sanctions need to be in place to prevent bad behavior from becoming rampant.

    While the anticipated increase in casino taxes had been put in the budget, Minns noted it was not yet legislated. This could leave room for a readjustment that will prevent casino operators from paying a higher tax revenue rate from owners of pubs and clubs. As it stands, the proposed tax rate, due to take effect by July 1, was projected to earn the government $364 million over three years and $120 million annually.

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    Topics: Casino, Featured, nsw, NSW Government, Star, Sydney

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