Treasurer refuses to back down as Star warns new tax could kill plans for two theatres, six star hotel

A proposed tax on gaming tables and pokies could mean Star Casino may have to scrap a new six star hotel and two new theatres in Pyrmont, the company has claimed.

The Star Casino has warned a proposed tax on gaming tables and pokies mean it may have to scrap a new six star hotel and two new theatres in Pyrmont.

A war is brewing between the NSW Government and The Star over the proposed increased tax rates that will raise an extra $364 million over three years.

The tax will affect both The Star and Crown casinos but only The Star has pokies, which will have a top tax rate of more than 60 per cent.

The Star’s new group chief executive Robbie Cooke warned the proposal announced by treasurer Matt Kean would “jeopardise” plans to build the two new theatres and a six star hotel.

“We want to deliver two new theatres to create a theatre precinct unmatched in Australia, and a six-star hotel,” Mr Cooke said.

The Star Casino in Sydney has taken aim at a proposed new gambling tax. Picture: Damian Shaw

“But any circumstances that might force us to pay significant additional taxes would jeopardise these investments planned for Sydney,” he said.

Mr Kean’s announcement of higher taxes for gaming tables and a top tax rate of 60.67 per cent on pokies from July next year wiped more than $620 million – around 25 per cent – off The Star’s value on the Australian Stock Exchange.

The Star is already facing $100 million fines in NSW and Queensland and $45 million in remediation work after the Bell inquiry found cultural issues had enabled money-laundering for years.

Mr Cooke said he and the casino’s new board “need to protect the business and make responsible decisions at the appropriate time. Since the weekend our share price and market cap have been severely damaged.”

However Mr Kean last night refused to take a backward step.

Treasurer Matt Kean says The Star should “be happy” to put gambling profits towards helping flood and bushfire victims. Picture: David Swift

After failing to stop serious money laundering in their casino, the Star should be happy to direct a small amount of their gambling profits towards helping families recover from bushfires, floods and COVID, and to pay the same pokies rates as the Crown in Melbourne,” he said.

The move comes as Premier Dominic Perrottet battles to turn the state’s 95,000 poker machines cashless, which is opposed by Clubs NSW. They in turn are furious at a secret deal Mr Perrottet signed with the casino to 2041 that would save it $1 billion in tax.

That deal is now in doubt after the Star lost its casino licence and would be replaced by Mr Kean’s new tax regime if it goes ahead.

However the potential loss of $500 million investment in new tourism assets for Sydney was greeted with dismay.

Urban Taskforce chief executive Tom Forrest said: “There is the very real chance that the unilateral announcement of the possibility of changes to the tax regime will threaten planned investments.

“Thought bubbles may be good politics but they have real consequences for companies and for investment decisions.”

Margy Osmond, chief executive of the Tourism and Transport Forum, said: “Anything that discourages industries like casinos from continuing to invest in development of new tourism, cultural and entertainment facilities and the jobs they provide is obviously a real problem.

“We would like to see these casino businesses continue to invest in great new facilities and tourism offerings that will help drive the upsurge in international visitors we expect to see came back next year.”