Star Entertainment Obtains Reduced Tax Hike in New South Wales

Star Entertainment, one of the biggest operators of land-based casinos in Australia, has announced that it reached an agreement with the New South Wales government to reduce the proposed casino tax hike.

In December 2022 the New South Wales government announced that it intended to raise the casino tax in the state starting from 1 July 2023. Star Entertainment, which operates the Star Sydney casino, criticized the proposal and said it would not be sustainable.

The tax increases included non-rebated duty rate rising from 17.91% to 20.25% and rebate duty rate from 10.00% to 12.50%. Moreover, the poker machine duty rate was supposed to change from a flat 20.91% rate to a tiered system, taking taxes all the way up to 60.67% for machines with over 12,000 dollars in monthly revenue.

The New South Wales Treasurer agreed to meet Star Entertainment representatives in order to discuss the new tax rates. The meetings did take place and now the casino operator announced that an in-principle agreement has been reached to reduce the proposed tax hike. However, the agreement has not yet been formalized so it does not produce any legal effects yet.

The proposed rates for rebate play and non-rebate play on table games remained unchanged following the discussion with Star Entertainment, as their main aim was to diminish the rise of taxes on poker machines.

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In terms of poker machines, the current flat tax will remain in place until 30 June 2030. However, starting from 1 July 2024, the rate will go up from 20.91% to 21.91%, and then on 1 July 2027 it will have another increase to 22.91%.

Then, after 30 June 2030, the government will finally make the desired switch to a tiered system, as it was previously proposed in December 2022. That will see machines with an average revenue under $2,666 not pay any tax, machines making between $2,666 to $6,667 will be taxed at a rate of 37.6%, pokies generating between $6,667 and $12,500 will face a rate of 42.1% and machines above $12,500 will be taxed at 51.6%. These rates are lower than those initially proposed by the government.

Moreover, an additional levy equal to 35% of Star Sydney gaming revenue above 1.13 billion dollars for each financial year will still come into effect from 1 July this year to 30 June 2030. The government also confirmed that it will not make changes to the current responsible gambling levy, which is set at a rate of 2 percent.

Speaking about the agreed changes, Robbie Cooke, the Chief Executive Officer and Managing Director of Star Entertainment, said that the amended rates will protect jobs in New South Wales and keep Star Sydney financially viable. With the new rates, Star Sydney expects to pay an additional 10 million dollars in taxes in the 2024 fiscal year.

Source: “The Star Sydney reaches agreement on casino duty rate hikes, expects annual impact of AU$10 million“. Inside Asian Gaming. August 11, 2023.