The Star Entertainment Group has reached an in-principle agreement with the New South Wales Treasurer, The Honourable Daniel Mookhey MLC, to amend casino duty rates with the state.
The duty rate changes are designed to help “deliver a sustainable outcome for The Star and to protect the jobs of thousands of NSW team members at The Star” and help the operator refinance its existing debt funding arrangements.
The operator didn’t agree with the former NSW Treasurer’s proposed increases to casino duty rates that were scheduled to come into effect on July 1, labelling them as “not sustainable, flawed in its design”, adding they would “significantly challenge the economic viability of The Star’s Sydney business” and put thousands of jobs at risk.
Once formalised, the amendments will see duty rates changed in three areas – rebate play, table games and poker machines – while an additional levy will also be applied.
However, there will be no changes to the responsible gaming levy, which will remain at 2 per cent and will have no effect on the additional levy.
For rebate play, the duty rate will be raised from 10 per cent to 12.5 per cent, while the duty rate will increase for table games non-rebate play as well from 17.91 per cent to 20.25 per cent.
Duty rate changes for poker machines non-rebate play have been split into two categories – before and after June 30, 2030.
Excluding GST, poker machine duty rate will remain at 20.91 per cent until July 1, 2024, when it will increase to 21.91 per cent. It will rise again on July 1, 2027, to 22.91 per cent.
After June 30, 2030, exclusive of GST, duty rates for poker machines will apply to the average poker machine revenue of machines in use at The Star Sydney as follows:
- Less than $2,666 – 0 per cent
- $2,666 or more and less than $6,667 – 37.6 per cent
- $6,667 or more and less than $12,500 – 42.1 per cent
- $12,500 or more – 51.6 per cent
Between July 1, 2030, and September 30, 2030, The Star may request a good faith review of the poker machine duty rate and/or the associated thresholds having regard to the trading conditions and EBIT for The Star Sydney in the period 1 July 2023 to 30 June 2030.
An additional levy will apply until June 30, 2030, equal to 35 per cent of all Star Sydney gaming revenue above $1.125bn for each financial year.
Commenting on the adjusted casino duty rates, Robbie Cooke, CEO and Managing Director at The Star, stated: “The formal consultative and structured approach implemented by the government has enabled an in-principle agreement to be reached which protects our Sydney team’s jobs and the viability of The Star Sydney.
“While the in-principle agreement will result in an uplift in duties payable to the state, it has due regard to the circumstances of our Sydney business and as such helps to create a sustainable path forward for The Star Sydney. The expected additional duty payable in FY24 is circa $10m.”
Cooke continued: “It is also designed to provide employment certainty for team members in arrangements agreed with the United Workers Union. In addition, it will see The Star Sydney introduce a trial of its cashless gaming machine technology in October this year on 50 gaming machines and eight gaming tables.
“The arrangements enable us to continue working at pace to implement the significant reforms required to restore The Star Sydney to suitability, earn back the trust of the community, and ensure we remain a valuable contributor to the NSW economy.”
