Sydney’s Star casino thrown lifeline through reduced poker machine taxes

A beleaguered casino has been offered tax concessions amid fears it would have closed shop without state intervention.

The NSW government will introduce a transitional tax levy on Sydney’s Star casino, with NSW Treasurer Daniel Mookhey claiming the venue would go under without the intervention.

In return, the Star will commit to protecting more than 3000 jobs. The casino hires about 8000 people depending on seasonal shifts.

Friday’s announcement comes after Mr Mookhey previously flagged reducing the poker machine duties proposed for The Star by the former Coalition government.

While the increases were proposed to generate $364m over three years, Mr Mookhey blasted the figure as being “riddled with fiscal holes” and said his predecessor Matt Kean failed to consult with the casino.

“You cannot collect money with dead business. Fantasy numbers into fantasy budgets have no value to people in NSW,” he said.

Treasurer Daniel Mookhey believes The Star would have ceased operations without the government intervention. Picture: NCA NewsWire/ Gaye Gerard

The new duty rates are expected to draw in $55m over three years, or an extra $529m between now and 2030; however, changes may be made if The Star recovers faster than expected. The total amount of tax generated from the duties is forecast to be $2.7bn over 10 years.

Under the new tax duty rates, poker machines will be taxed at 20.91 per cent until June 30 2024, increasing to 22.91 per cent on July 1 2027, where it will remain until 2030.

Previously, the Perrottet government had intended to tax high-performing poker machines at 60.7 per cent.

“If the previous regime was implemented as it was proposed it would lead to Star having to close its Sydney operation,” Mr Mookhey said.

“This is a decision that has not been easy and has taken a great degree of effort by the government to verify the facts that it was told.”

The Minns government will scrap the Coalition’s plans to impose higher duty rates on poker machines. Picture: NCA NewsWire/ Nikki Short

In an announcement to the ASX, The Star’s chief executive and managing director Robbie Cooke said the in-principle tax rates will help create a “sustainable path forward” for the business.

“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,” he said.

However, Liberal Party deputy leader Natalie Ward accused the government of giving “big casinos” a tax break.

“I don’t know any business in NSW that has the luxury of the Premier saying, ‘Just pay the tax that you think you can afford’,” she said.

In 2022, a scathing inquiry into The Starby Adam Bell SC condemned it for its links to organised crime, money laundering and systemic governance, risk and cultural failures.

As a result, The Star’s casino licence was suspended and it was fined $100m; however, it is still able to operate under a special manager appointed by the NSW Independent Casino Commission.