Star Entertainment share price falls following NSW casino tax proposal

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Star Entertainment Group’s share price fell by 15 per cent on Monday following NSW Treasurer Matt Kean’s announcement that Sydney’s two casinos will pay hundreds of millions of dollars extra in taxes on table game and poker machine operations.

Kean wants to increase the taxes imposed on the Star’s flagship Pyrmont casino, as well as Crown Sydney, pledging to raise an additional $364 million to be channelled into the state’s communities worst affected by the pandemic, bushfires and floods.

The Star’s share price plummeted on Monday following the NSW government’s proposal to increase the taxes imposed on casinos.Credit:Virginia Star

It comes amid tense warfare over Premier Dominic Perrottet’s crusade to turn the state’s 95,000 poker machines cashless, a proposal which is fiercely opposed by the state’s powerful clubs lobby group. Clubs NSW has long protested that casinos such as The Star pay less tax on poker machine revenue than hotels or local clubs.

The Star’s chief executive Robbie Cooke criticised the increased tax proposal, arguing the group “wasn’t sure” how the state government had modelled its financials, “nor the basis for suggesting The Star does not pay its fair share of taxes” in a release to the ASX on Monday.

The casino said it was seeking to “urgently engage” with the government as to the sustainability of the proposed tax changes and the potential consequences for the broader business “as The Star seeks to fast track cashless gaming and carded play to deliver safer gambling, whilst also continuing on a remediation path to return to suitability”.

“No other details have been made available in relation to the potential reforms (including as to how the taxes would be levied or applied). There has been no consultation from the NSW government with The Star on this matter,” the statement said.

Under the government’s proposal, casino poker machines would attract a top tax rate of 60.67 per cent, which is expected to take effect from July next year. The move would bring NSW into line with taxation rates announced in Victoria’s most recent state budget, which is more than that paid by hotels and clubs.

The Star is in the midst of an expensive remediation plan, billed at up to $45 million next year, so it may regain the coveted state gambling licence it lost earlier this year following the Bell inquiry which uncovered a deep-rooted cultural issue that had enabled money-laundering in its casino’s for years.

The Star’s share price has fallen by close to 40 per cent over the past year, following an investigation by this masthead which broke the news of the alleged money laundering later confirmed by Adam Bell SC’s findings. The group recorded a $199 million loss in 2022 and set aside a goodwill impairment charge of $162.5 million for its Sydney casino.



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