NSW’s Planned Pokie Tax Hike Sets the Stage for Broader Reforms

Australia’s New South Wales government introduced proposed changes to poker machine taxation. The new reform will bring casino operator taxes in line with those for machines in hotels and clubs. The state plans to use the extra income to aid struggling communities. Casino representatives have already spoken up against the changes, but the government appears adamant in its decision.

The Updated Rates Target Large Casinos

The New South Wales gaming industry has been in a state of upheaval over the past few months after officials expressed their intention to overhaul pokie machine regulations. The move provoked severe backlash from lobbying groups preferring to keep the lucrative status quo. Despite the clubs’ concerted efforts, NSW premier Dominic Perrottet has stayed true to his word as the government introduced the first planned regulatory changes.

Luckily for club owners, the authorities first set their sights on casinos, which pay less tax on their machines than those at other venues like bars and hotels. The planned changes will equalize the tax rate, injecting much-needed funds into disadvantaged communities.

State treasurer Matt Kean noted that replacing the existing regime would contribute an extra A$364 million over three years, aiding areas struggling with floods, bushfires, and post-pandemic recovery.

These changes will ensure that the casinos continue to make an appropriate contribution to the community and support the delivery of vital government services.

Matt Kean, NSW state treasurer

Despite seemingly favoring clubs, the proposed changes have not eased their concerns. The initiative marks the first step towards bringing order to a previously loosely regulated industry rife with alleged criminal and money laundering activity.

The Star Lashes Back at Authorities

Casinos have, understandably, spoken out against the tax hike. The Star’s management announced it had not been consulted beforehand and urged authorities to engage in constructive dialogue to discuss the ramifications of such a raise. The Star Entertainment Group CEO Robbie Cooke noted that the casino paid 70 to 80 percent of its profits in corporate and state taxes, implying that NSW authorities were unfair to the company.

We are not sure how the Government modeled its financials nor the basis for suggesting The Star does not pay its fair share of taxes.

Robbie Cooke, The Star Entertainment Group CEO

The Star is still in hot water with Australian authorities after an expert review unveiled substantial issues and deficiencies. The tax hike announcement was another significant blow for the company, as its shares tumbled by 12% when the information became public. The brand is facing licensing issues across the country, with an increasing number of states launching detailed investigations into its operations.