Casinos to pay more tax in NSW after pokie reprieve

The two major NSW casinos have agreed to pay more tax after drawn-out negotiations with the state government.

Tax rates for Crown Sydney and The Star casinos will increase, backdated to July 1, after an agreement was signed on Monday night.

The Star, which has been given a reprieve on a planned poker machine tax increase until 2030, has also agreed to pay a transitional levy until the new duty regime kicks in.

The changes are in line with an in-principle agreement reached with The Star announced in August this year. 

Crown Sydney
Tax rates for NSW's two big casinos will increase from 17.91 per cent to 20.25 per cent from July 1.

Both businesses have taken major hits to their profit margins in recent years, raising fears of mass job losses.

The government will introduce legislation aimed at protecting more than 3000 jobs at The Star across the next six years.

Tax rates for the casinos will increase from 17.91 per cent to 20.25 per cent from July 1, 2023.

Duty on rebate play, being non-NSW players, will increase from 10 per cent to 12.5 per cent.

The Star will also pay a 35 per cent tax on total gaming revenue that exceeds $1.125 billion in a financial year, in addition to existing duties.

Treasurer Daniel Mookhey said the negotiations were one of the most difficult challenges he had inherited from the previous government. 

“The previous government had bungled their casinos policy," he said on Tuesday.

"These arrangements will see both casinos pay higher taxes."

Planned tax increases for Sydney's two casinos were announced by the Dominic Perrottet-led former coalition government in December 2022.

Those changes were intended to raise $350 million across three years.

The Star casino
Major hits to The Star's profit margins in recent years have raised fears of mass job losses.

Mr Mookhey said plans to increase the poker machine tax on The Star could have shuttered the business.

"You can't collect tax from a dead business," he said in August.

Opposition gaming spokesman Kevin Anderson said the former government supported recommendations from the Bell and Bergin inquiries into operations at Crown and The Star and forced both casinos to implement a considerable reform agenda.

Recommendations included introducing additional measures to strengthen compliance requirements including serious penalties.

On the formalisation of the new arrangement, Star Group chief executive and managing director Robbie Cooke said constructive engagement by the government was appreciated.

"The formalisation of these arrangements protects our Sydney team’s jobs and enables us to continue the important ongoing work required to restore The Star Sydney to suitability, and to earn back the trust of our stakeholders," Mr Cooke said.

But Mr Anderson said the new agreement was "largely letting these big enterprises off the hook by allowing them to operate under a pay-as-you-can approach". 

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