On Monday, Australia’s Star Entertainment Group had its shares decline almost 18% following the New South Wales (NSW) government’s proposal of raising casino poker machine taxes in the state next year.
If the new tax rate is approved, it will come into effect in July of next year and could potentially raise additional revenue of AU$364 million over the course of the following three years. To support the NSW proposal, Matt Kean, NSW Treasurer, ensured that the money, which will be raised through the increased tax would go to support communities, which need to recover after the consequences of the global pandemic, bushfires, and floods.
NSW Proposes Additional Gambling Tax on Companies like The Star and Crown
With the proposal for a new tax on poker machines in NSW, companies like Star Entertainment Group and Crown Resorts will have to pay about an additional AU$120 million per year in taxes. According to Matt Kean, the new poker machine taxes in the state will be raised to match the rates introduced in Victoria as well as pubs and clubs located across NSW. On Friday, it was announced that the taxes on gaming tables will also be increased. If the tax changes are implemented the next year, they will apply only to the two state casinos located in Sydney.
Despite describing the tax increase as a tool to help the funding of important government services, the NSW Coalition will most likely also use the additional tax income for the upcoming elections. The NSW election is due to be held on March 25, with current poll results showing the Coalition ranking beneath the Labor opposition.
In a press release, Kean noted the importance of state casinos paying their share of gambling-related taxes. According to him, the newly introduces tax rates will stand in lieu of the current tax regime, which allows state casinos to pay lower poker machine taxes than hotels and clubs operating in NSW.
Star Entertainment Shares Drop After Tax Increase Proposal, Company to Actively Participate in New Tax Rates Discussions
Following the news about the increase in poker machine tax rates starting the new fiscal year, on Monday, Star Entertainment Group’s shares suffered a huge decline, marking a 17.83% drop, closing at AU$2.12. This was the company’s lowest closing price since the decline during the pandemic in 2020.
Robbie Cooke, The Star chief executive, criticized the NSW treasures for not discussing the tax rate proposal with the casino operator. Cooke said the company was not certain of the way the NSW government was handling its finances and why it would assume The Star was not paying its fair share in gambling taxes to the state. The casino’s chief executive added that not only does The Star pay gaming taxes, but it also spends millions in corporate taxes, amounting to a total of about 70% of the company’s profit.
Following the huge decline in its shares, The Star announced that it is actively trying to engage in the discussion over the proposed poker machine taxes by the NSW government.
- Author
Olivia Cole
