NSW Government Looks to Raise Taxes on Casinos
The New South Wales government is looking to raise funding for new socio-economic programs in the state. Where are they getting the money from these programs? Casinos. Over the weekend, news broke of a governmental proposal to increase taxes on earnings from pokies and casino games. If the new tax rates go into effect, the government could raise up to $364 million over the next three years.
NSW Government Looks to Raise Taxes on Casinos
It’s no secret that the NSW economy has been under tremendous pressure in recent years. Wildfires, floods, and the COVID-19 pandemic has left many communities in financial hardship. The government is looking to raise funds to help communities hit hardest by recent events. Lawmakers are looking to raise approximately $364 million for programs to help regions. They plan to raise this money by increasing taxes on casinos in the state.
According to reports, the government is looking to raise the tax rate on casinos to 60.67% on all real money pokies and table games throughout the state. Until this point, bars and hotels pay a higher tax rate than casinos. The government has been criticized in recent years due to this, with ClubsNSW being the loudest opponent.
The increase in taxes comes after revelations from Star Entertainment avoided paying up to $9 million in taxes. Initially, the casino had an agreement with the state that would have allowed it to save up to $1 billion in taxes over 21 years. However, their violations of gaming laws nullified the agreement.
NSW Treasurer Matt Kean believes the new measures by the government will help boost the state’s fiscal sustainability. According to Kean, “It’s important that casinos pay their fair share of tax. These reformed tax rates will replace the existing regime under which casinos pay less tax on poker machines than hotels and clubs. These changes will ensure that the casinos continue to make an appropriate contribution to the community and support the delivery of vital Government services.
Tax Rate May Be a Tiered Structure
Treasurer Kean claims that the new taxes will be similar to those recently proposed by Victoria. The Victorian tax structure is a tiered model that steadily ramps up to the top rate. NSW could use a similar tiered system for casinos in the region. Kean says that casinos provide entertainment and employment opportunities for the state. These new taxes will help to support the casino’s ongoing contribution to the community.
Of course, the government is talking a big tax game, but they are not sharing their plans with the money. All they claim is that they are planning to use the funds for socio-economic programs hit hardest by natural disasters and COVID.
The new tax rates will apply to Crown Resorts Sydney and The Star Sydney casinos in NSW. These new taxes are coming on top of regulatory fines and upcoming potential civil penalties on both casinos.
Are The New Taxes Another Form of Punishment?
Some may see the new tax structure from the NSW government as the latest punishment against Crown Resorts and Star Entertainment. Both casinos have faced regulatory inquiries, fines, and licenses suspended due to violations of regulatory laws.
However, one has to wonder at what point the government will stop punishing casinos for wrongdoings. Both companies continue to face lawsuits and civil penalties for their actions. At some point, one has to wonder when enough is enough. The money the casinos can shell out to stay operational will run out at some point.
One could argue that casinos will make money despite the legal penalties and taxes. However, at what point does the weight of the strain from regulators and the government force the casinos to leave the region?
