Crown And Star Entertainment Agree to New NSW Tax Scheme
After a lengthy negotiation period, Crown Resorts and Star Entertainment have agreed to a new tax scheme with the NSW government. Rates will rise to 20.91% and be backdated to 1 July 2023. However, the Star was given a reprieve on tax increases on poker machines, which are now delayed until 2030.
New Tax Deal Raises Rate to 22.91% in Three Years For Star
A new tax deal was agreed upon on Monday between NSW and both Crown Resorts and Star Entertainment. Under the new deal, Crown Sydney and The Star will see tax rates increase from 17.91% to 20.25%. These rates will be backdated to 1 July 2023. For Crown, the deal it signed with the previous government will remain in place.
However, Star Entertainment was able to negotiate a more favourable deal. The Star will pay the 20.91% rate until the end of June 2024. The casino will pay 21.91% in taxes for the following fiscal year. Then, the rate will increase to 22.91% three years after that.
Star Gets Poker Machine Tax Reprieve
Before the new deal negotiation, The Star was going to be subject to a new tax scheme on poker machines. However, Star was able to get that delayed until 2030. In the meantime, the casino will pay a transitional levy on machines. Star Sydney must pay 35% of all revenue above $1.125 billion annually.
Starting 1 July 2030, NSW will impose a sliding scale rate for poker machines. The new scale will be applied to each machine as follows:
- Average revenue above $2,666 – 37.6%
- Average revenue above $6,667 – 42.1%
- Average revenue above $12,500 – 51.6%
Tax Reprieve Will Save Jobs at Star Sydney
The new deal will help these popular real money casinos stay afloat as they recover from regulatory sanctions. Star Entertainment will be the biggest benefactor of the recent agreement. In addition to the tax reprieve, the NSW government introduced legislation last week to provide job security to over 3,000 workers at The Star for the next six years.
NSW Treasurer Daniel Mookhey said, “The previous government had bungled their casinos policy. It was one of the most difficult challenges I inherited. These arrangements will see both casinos pay higher taxes. The government can now proceed with legislation which will see more than 3000 workers have their jobs protected at The Star.”
Crown Failed to Receive a Break on Taxes
While the Star could get a bit of a reprieve, Crown Resorts did not. According to reports, Crown was trying to get a new agreement drawn up due to recent struggles due to regulatory fines and delays in casino openings.
The government rejected the deal but said it would be open to negotiations about alleviating some of the pressure. Whether this means some form of delay in payment of taxes or something else remains to be seen.
What is known for certain right now is that both Crown and Star Entertainment will be on the hook for millions more in taxes due to the new scheme. This comes at a time when both companies are struggling to keep facilities open and are also struggling to pay fines.
Interestingly enough, a way that the government could go about raising more taxes would be to legalise and regulate online gambling. All they need to do is look at the successes of gambling at online casinos in the UK and the regulated American markets to see the income that could be generated through legal and regulated online gambling.
A large portion of the Australian public already gambles at unregulated offshore online casinos. Why not regulate the market and keep those tax dollars in Australia? It would be the best of both worlds for players and lawmakers.
