Earlier this year, Star Entertainment Group, an Australian casino and hospitality company, had to slash hundreds of jobs and executive bonuses to deal with the underperformance of its properties and the tax hike in New South Wales. However, the company has now managed to reach a concession on casino duty rates with the NSW government that will help it get its finance under control.
As reported on Friday, the state agreed to implement lower, phased increases to the taxes the casino company must pay. As a result, the current 20.91% tax on poker machines will be maintained until the end of the fiscal year. The tax wouldn’t rise until July 1, 2024, when it is expected to climb to 21.91%. Three years later, the tax will further increase to 22.91%.
Finally, on July 1, 2030, the pokies tax will increase as follows:
- Tax for average poker machine revenues over AUD $2,666 – 37.6%
- Tax for average poker machine revenues over AUD $6,667 – 42.1%
- Tax for average poker machine revenues over AUD $12,500 – 51.6%
In addition, as of July 1, 2023, the tax rate on rebate play increased to 12.5% (previously 10%). Table games, on the other hand, are now taxed at 20.25% (previously 17.91%). Finally, Star Sydney’s gaming revenue surpassing AUD $1.125 billion will be taxed at 35% each year.
The gradual implementation of the new tax regime will shield Star Entertainment from having to resort to emergency measures such as job cuts.
The Arrangement Will Help Star Entertainment in Time of Need
Robbie Cooke, Star Entertainment’s chief executive officer and managing director, said that the agreement with the NSW government will help the company maintain the profitability of its The Star Sydney property without having to axe jobs.
Cooke explained that the arrangement will eventually cause an increase in the taxes Star Entertainment has to pay. However, the current tax roadmap is much more sustainable and will benefit the company in the long run.
Cooke added that the deal with the government will also allow his team to continue working on the ongoing reforms following the multiple regulatory hurdles. The NSW agreement will also make it easy for Star Entertainment to continue with its plans to pay its outstanding debts. The company promised to release more information on that at a later date.
In the meantime, Star Entertainment plans to sell its Gold Coast property.