| Updated:2024-04-17 16:32 Views:84 |
The New South Wales (NSW) Government has postponed the announced tax increase on gaming revenue for the Star Entertainment’s Sydney casino less than a fortnight before the start of the new tax rate implementation, as The Australian Financial Review reports. At the same time, one of the leading Australian casino corporations reportedly said that its Brisbane sales deal with the property trust Charter Hall has been cancelled due to another delay in the project development.
Treasury Sales Agreement Cancelled:
Under the sales agreement signed in 2021, Charter Hall was to pay $248 million for the Treasury casino and hotel building complete with the parking lot and lease it back to Star for more than 30 years. But Charter Hall reportedly said on June 20, 2023 that the company would withdraw from the transaction due to the certain terms and conditions of the agreement having not been met by the contracted deadline. But this is not the only project facing delays and causing additional troubles to the Star.
Queen’s Wharf Casino Project Delayed:
According to The Australian Financial Review, Star’s new Queen’s Wharf casino project in Brisbane has been postponed four times over the last 18 months and is now scheduled for the April 2024 launch. The $3.6 billion project is designed to include four luxurious hotels which will replace the Treasury. As a consequence of these developments, Star shares fell 3.2 percent to $1.06 on June 20 to represent a 36 percent fall year-to-date.
Facing Gaming Tax Increase:
The Star Entertainment has been facing financial issues for its failure to comply with anti-money laundering laws and a series of financial breaches committed over the last 12 months causing legal action from the financial regulator. In addition, the company is expecting a major tax increase from the NSW Government which have surely affected the Star’s current projects.
Tax Application Postponed:
The same source reports that the NSW Government has considered the new tax arrangement and postponed any respective legislation ”until at least August.” The tax increase will reportedly affect the Star and Crown Resorts while aiming to collect $364 million from these companies by 2026 through levies on the poker machines and gambling tables.
Star CEO Robbie Cooke reportedly said the proposed tax increase “was ill-conceived with no consultation and had no regard to the capacity of our Sydney operation to afford the impost.” Cooke added: “If implemented as originally proposed, the additional duty would significantly challenge the economic viability of the Sydney business and put the jobs of up to 4000 hardworking Sydney employees in jeopardy.”
Government Concerns:
But the NSW Treasurer Daniel Mookhey reportedly stated that there was “nothing exceptional about governments engaging with businesses ahead of introducing tax changes.” Mookhey continued: “What is exceptional is that the previous government did not do that with these businesses. It is well known that certain businesses are facing big challenges, but it’s a sensible thing to do when you’re dealing with 1000s of people’s jobs, to work through it as calmly and methodically as you can.”
Former Government Claims:
According to the Australian Financial Review, the former NSW treasurer Matt Kean responded to the Mookhey’s claims about the previous government and said that Star ”should look in the mirror” when blaming others. Kean reportedly said: “As The Star management is legally obliged to reveal its true financial situation to the ASX, Treasury modeled the tax increase based on the Star’s ASX filings and other public statements and found The Star could support the increase in tax on its profits.”
Kean added: “The prior appalling behavior of the Star detailed in inquiries, which included behavior that robbed the NSW people of money owed, was not caused by the former NSW government.”
