Casino Operators in New South Wales Agree to New Tax Arrangements
Casino operators in New South Wales (NSW), Australia will soon be facing higher tax rates, despite their efforts to negotiate. Both Star Entertainment and Crown Resorts have recently agreed to revised tax arrangements with the state government. These new tax deals, announced by Treasurer Daniel Mookhey, will bring significant changes for the casinos.
Under the new agreements, both The Star and Crown will see an increase in tax rates, retroactively effective from July 1, 2023. While Crown was already aware that it wouldn’t be able to negotiate a new deal, The Star will be subject to a transitional tax on slot machines until a new tax regime takes effect on July 1, 2030.
The tax rates for The Star’s slot machines will see a gradual increase in the coming years, eventually reaching up to 51.6% for higher revenue levels. In addition, The Star now has to pay 20.25% on table game revenue, an increase of almost 3% from the previous rate, and 35% of all gaming revenue if the casino makes over AUD1.125 billion (US$733 million) a year.
However, these tax adjustments come with a safeguard for employees at The Star. The NSW government is set to introduce legislation aimed at securing the livelihoods of over 3,000 workers for the next six years.
The former government had initially proposed these tax increases without prior consultation with the casino operators. The proposed tax hikes were expected to yield as much as AUD350 million (US$230 million) in new revenue to the state over three years. However, the potential ramifications for the casino operators were not considered.
Mookhey intervened to discuss the tax rates with Star and Crown, emphasizing the importance of keeping businesses operational to ensure tax payments. Both casino operators have now agreed to adhere to the heightened tax obligations, despite the potential impact on their bottom lines.
The new tax arrangements have been established to ensure that the state government can generate additional revenue while providing protections for casino employees in NSW.
