Clubs fear state budget will announce tax rate hike on pokies

Local clubs are ­bracing for a significant poker machine tax hike, with fears some venues may be slugged double their current rate to boost the upcoming state budget.

Local clubs are ­bracing for a significant poker machine tax hike, with fears some venues may be slugged double their current rate.

Senior club officials say they remain in the dark about any changes to the current revenue structure ahead of next month’s state budget, as the Minns government refused to rule out changes to the gaming machine tax on several occasions during Question Time this week.

There is growing industry speculation tax rates on poker machine profits in clubs could be lifted to a similar level currently paid by hotels.

Poker machine revenue is measured each quarter in NSW, with tax rates dependent on earnings, although there are significant differences between clubs and hotels.

For example, the hotel industry is currently taxed 50 per cent if profits are above $1.25m. The rate for local clubs is just 22.5 per cent for the same level of earnings.

Clubs believe they are about to slapped with higher taxes on their poker machine revenue.

Registered clubs have “not-for-profit” status and are provided government tax concessions due to their work with local communities. These concessions cost NSW coffers more than $1bn each year.

One leading club boss, not authorised to speak publicly, told The Daily Telegraph: “Our advice is that there are changes coming and the cabinet will vote on recommendations from Treasury. We have been told they have a higher dollar figure in mind which could have us much more on par with hotels.”

Premier Chris Minns is not giving anything away. Picture: Tom Parrish

A second source added: “There are government contacts warning us that some of us could soon have their tax doubled … But we have not been briefed.

“A lot of venues have also done their budgets or made ­financial arrangements for next year (based on the current pokies tax rate).”

Speculation about a possible “super tax” on club poker machines was first reported in April by The Sunday Telegraph.

The Minns government has been ducking and weaving on the issue in recent days in state parliament.

Under questioning from the Opposition, Gaming Minister David Harris said: “We are not going to go through an exercise of ruling things in and out.”

When asked about the same issue, Treasurer Daniel Mookhey said: “Policy development is continuing.

“I will be giving the budget in June. The budget will remain the principal document that sets out the government’s intentions when it comes to tax policy.”

Mr Mookhey said the ­government was working through recommendations from an independent gambling panel, including on the future rollout of cashless gaming.

“The government has asked Treasury and related agencies to conduct detailed economic modelling,” he said.

When asked about the issue on Thursday, Premier Chris Minns told parliament simply: “We will release the budget when it is budget day”.

Opposition gaming and racing spokesman Kevin Anderson said it was “disappointing” Labor “could not rule out a potential increase” to pokie taxes.

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Originally published as Clubs fear state budget will announce tax rate hike on pokies