SkyCity Adelaide is fighting SA state government over millions in taxes it says it shouldn’t pay

SkyCity Adelaide has taken the South Australian state government to court, arguing it shouldn’t have to pay millions in taxes.

SkyCity Australia chief operating officer David Christian in the Adelaide casino.

SkyCity Adelaide has taken the state government to court, arguing it is not liable for millions of dollars in taxes relating to its rewards program.

Documents lodged with the Supreme Court show the casino operator is disputing the state government’s interpretation of “net gambling revenue”, on which the casino is taxed.

Back in 2016, following an investigation by the State Commissioner of Taxation, the casino’s tax liabilities were reassessed to include credits accrued by rewards program members, through gambling and other spending at the casino.

Given that loyalty points could be converted to gaming credits and then used for further gambling, they were being assessed as gambling revenue, which the casino is taxed on.

The casino argues the commissioner was not considering the credits accrued by program members as monetary prizes, and was therefore not subtracting those amounts from its gambling revenue figure, which the casino argues it should have in both cases.

SkyCity says the amounts in dispute for just the 2014 and 2015 financial years add up to $1.48m, and it would also be liable for interest of 20 per cent per year on top of that.

If the casino was found to be liable for the duty for all subsequent financial years, plus interest, the figure owed would likely run into several millions of dollars.

The casino is seeking declarations from the court that rewards credits don’t constitute gambling revenue and it should not have to pay duty on them.

The government’s defence says the commissioner’s reassessment of the duties owed by the casino were “made validly ... on the basis that there had been an underpayment of casino duty’’.

“When converted credits are wagered the rewards program member puts at stake the value of the debt owed by the applicant to the ... member,’’ the government says.

“Converted credits, when wagered, therefore form part of the ‘gross amount received by the licensee ... for or in respect of consideration of gambling’ within the meaning of the definition of gross gambling revenue.’’

SkyCity Australia chief operating officer David Christian said there was no process in its Casino Duty Agreement which applied to complimentary bets, so the government and SkyCity agreed that it was appropriate for the Court to rule on the issue.

“The Commissioner and SkyCity have been in discussions regarding one aspect of the Casino Duty Agreement as it applies to complimentary bets, as well as the definition of monetary prizes,’’ he said.

“Whilst those discussions have been open and constructive, the outcome was that there was no agreement as to how the Casino Duty Agreement applies to complimentary bets.

“As the matter is now before the Supreme Court it is not appropriate that any further statement be made until the Court issues its determination.’’

Originally published as SkyCity Adelaide is fighting SA state government over millions in taxes it says it shouldn’t pay