The New South Wales (NSW) government has put forth a proposal to raise the tax rates for the two land-based casinos in the state, with the objective of generating an additional AU$364 million over the next three years. The increased tax rates will primarily apply to gaming tables and poker machines at the Star Sydney and Crown Sydney casinos. The exact tax rates for the casinos are yet to be confirmed. The NSW government believes that these changes will contribute to the state’s fiscal sustainability and support the ongoing recovery from the pandemic, bushfires, and floods.
Enhanced Taxation and Fiscal Support:
According to NSW Treasurer Matt Kean, the proposed tax rate adjustments aim to ensure that casinos pay their fair share of taxes. The updated poker machine tax rate would align NSW with Victoria, following recent reforms in casino taxation arrangements announced in the 2022-23 Victorian budget. Kean emphasized that these changes are necessary to guarantee that casinos make an appropriate contribution to the community and enable the government to provide essential services.
Funding for Gambling Harm Prevention:
In addition to the tax rate adjustments, the NSW government plans to allocate $33 million from the Responsible Gambling Fund in the 2022-23 financial year. This funding will be utilized to support individuals affected by gambling harm, educate the public about the risks associated with gambling, and invest in research to gain a better understanding of gambling behavior. The budget allocation represents an increase from the previous year, with an additional $5 million per year allocated to the Responsible Gambling Fund, adjusted for inflation.
Concerns and Response from Star Entertainment Group:
Star Entertainment Group expressed its criticism of the proposed tax rate changes, highlighting the lack of consultation and clarity from the government regarding the implementation and impact of the taxes. The company stated that the potential consequences of the proposed reforms would depend on the specific details and implications for its operations in Sydney. Star intends to engage urgently with the NSW government to address the sustainability of the proposed changes and their potential impact on its business. The company emphasized its commitment to advancing cashless gaming and carded play for safer gambling practices while striving to regain the trust of the community.
Star’s Previous License Suspension:
The NSW government’s proposal follows Star Entertainment Group’s suspension of its casino license and a $100 million penalty imposed in October. The suspension was a response to a series of shortcomings identified in an independent report by Adam Bell SC, which revealed anti-money laundering and social responsibility failures at Star Sydney. The report exposed incidents of deceptive reclassification of gambling spend as hotel expenses, misleading banking institutions, and allowing potentially criminal entities to conduct casino operations. Star was given a deadline to respond to the report’s findings, and its interim chair outlined the company’s commitment to cultural transformation, increased transparency, robust governance, and heightened accountability.
The proposed increase in tax rates for land-based casinos in NSW aims to generate substantial revenue for the state over the next three years. By ensuring that casinos pay their fair share of taxes, the government aims to support fiscal sustainability and provide essential services to the community. While Star Entertainment Group has expressed concerns about the lack of consultation, the company is determined to engage with the government to assess the sustainability and impact of the proposed changes. The ongoing focus on gambling harm prevention, with increased funding allocated to the Responsible Gambling Fund, reflects the government’s commitment to addressing the social impact of gambling and promoting responsible behavior.