Inside Dominic Perrottet’s deal that gave The Star $1 billion of your money

A feud has ignited between Dominic Perrottet and ClubsNSW over a deal to save The Star Casino $1 billion in taxes— which was sealed at a time when the now-Premier claimed he was “uncomfortable” about gambling revenue.

A war has broken out between Dominic Perrottet and ClubsNSW over a deal that will save The Star Casino $1 billion in taxes at the time he claimed he was “uncomfortable” about gambling revenue.

Mr Perrottet said last week he was “uncomfortable” during his time as treasurer at the amount of money generated from “taxing on the misery of others” through poker machines.

But The Daily Telegraph can reveal that during his time as treasurer Mr Perrottet signed off on a favourable tax deal with The Star that will save the casino more than $1 billion in tax on gambling revenue.

A gambling industry insider said: “It is utter hypocrisy for the Premier to say he worried about gambling while signing away billions of dollars of taxpayer money to a casino.”

Analysis of the deal reveals that if gaming at The Star returns to pre-Covid levels and grows by a modest three per cent a year it will save more than $1 billion compared to the previous marginal tax rate agreement.

Premier Dominic Perrottet has come under fire for a tax deal he signed off on as treasurer. Picture: Justin Lloyd.

The carefully buried document also reveals that The Star pays substantially less tax on poker machine revenue than hotels or not for profit clubs.

ClubsNSW chief executive Josh Landis said: “It is inexplicable why The Star should pay a lower rate of tax than clubs.”

“Clubs are not for profit organisations that return the money they make to the community while The Star is a casino that delivers the profits it makes to wealthy shareholders.”

Marcelo Veloz, chief executive of the City Tattersalls Club Group, said: “It’s outrageous to think that some community clubs are paying more gaming tax than the Star Casino. Clubs give back around $100 million to their local communities every year, while the Casino’s profits are simply distributed among their investors.”

Mr Perrottet signed the 20 year deal with The Star’s chief executive Matt Bekier in May 2020 before he resigned at the start of the damning Bell inquiry which found the casino was unfit to hold a casino licence.

At the time The Star issued a statement to the Australian Stock Exchange saying the introduction of a flat rate tax, which began this financial year, provided “regulatory certainty”.

The deal signed by Mr Perrottet and then-chief executive Matt Bekier

has been slammed by ClubsNSW’s Josh Landis.

The deal wiped out marginal rates of tax for earnings from gambling. Instead it installed a flat rate tax for non-rebate duty for table gaming – money earnt from Australians playing roulette and blackjack – of 17.91 per cent, the same as rival casino Crown.

In its statement The Star added in GST and the two per cent responsible gambling levy to report it would pay 29 per cent tax.

The rebate duty tax for earnings from VIP gamblers and non-Australians is 10 per cent of which 9.09 per cent is GST – meaning tax paid on gambling earnings from foreign whales is taxed at just 0.91 per cent.

The Star Casino would save millions in tax under the deal. Picture: Damian Shaw

Pokies in clubs and pubs are taxed under a marginal rate system similar to the one that The Star was taxed under before Mr Perrottet’s deal.

Pubs pay a top rate of 50 per cent plus 9.09 per cent GST.

Clubs pay a top rate of 26.15 per cent plus a community grant of 2.25 per cent and GST of 9.09 per cent bringing it to a total of 37.49 per cent.

By contrast pokies at The Star are taxed at 20.91 per cent, which with GST and the responsible gambling levy, bring that to 32 per cent.

Over the course of the agreement it scales up to just 22.91 per cent. Almost half the top rate pubs are paying.

Average pubs are slugged almost double what The Star pays under the marginal rate system.

The Star’s tax savings under the new deal are expected to start at around $18 million a year and rise over the two decades to $150 million.

A spokesman for the Premier said: “Tax revenue, negotiated by Treasury officials, was to be no worse off under the Star Casino agreement compared to the old agreement.

“The Budget papers show tax revenue for casinos is increasing by 143 per cent compared to gambling revenue from clubs.”

Originally published as Inside Dominic Perrottet’s deal that gave The Star $1 billion of your money