Premier should implement proposed tax on Star casino

Addicted to gaming tax revenue, NSW governments for years have turned blind eyes to The Star Sydney casino’s miscreant and illegal behaviour under the questionable rubric it was “too big to fail”. Now it appears Premier Chris Minns is wondering how much he can squeeze the golden goose without risking serious damage.

A proposed new tax on casino gaming tables and poker machines would deliver an estimated $120 million a year windfall to the public purse, but The Star has already threatened it will review its Sydney operations if the hike goes ahead.

Star Entertainment Group will appoint a new chief executive of The Star Sydney after the departure of Scott Wharton.

Louise Kennerley

Minns would not be drawn on Monday over whether his government would maintain the casino tax increase that was announced by the former Coalition government but said he would wait for budget briefings. “We’ll be having discussions with the Treasury in the coming days as we get a full picture of the revenue side of the budget and future policy measures,” he said.

The proposed top tax rate of 60.67 per cent on casino poker machines was scheduled to take effect in July and would bring NSW into line with new gambling taxation rates announced by the Labor government in Victoria.

Former treasurer Matt Kean proposed the tax increase in December. No government dared take on the casino previously, but The Star brought the tax upon itself after its casino licence was suspended for failing to stem criminal activity and money laundering as revealed in a 2021 investigation by Herald and 60 Minutes. The proposed tax regime will replace a 2020 agreement with The Star that locked in a sweetheart deal until 2041 that was expected to save the casino more than $1 billion in tax. The Perrottet government tore up the deal after two independent inquiries found Star Entertainment Group unfit to retain its coveted casino licences in NSW and Queensland last year. The inquiries’ findings suggested The Star had even outdone Crown’s misdeeds.

Nevertheless, The Star has been repairing itself under the guidance of Philip Crawford, the head of the revamped NSW Independent Casino Commission, as it struggles to prove its suitability to hold casino licences. Its board and executive team have been completely overhauled and on Monday the resignation of Scott Wharton, chief executive of Star Entertainment Group’s flagship Pyrmont casino, was announced just eight months after his appointment last July.

However, the casino thinks the proposed tax threatens the viability of the business. The Star flagged in February that it faces a hit of up to $1.6 billion if the tax proposal is legislated and said it would be forced to review the Sydney casino’s operations.

Until Minns’ less-than-clear comments on Monday, the casino’s threat had apparently fallen on deaf ears. During the election campaign, the now Treasurer Daniel Mookhey said Labor would not reduce the tax if elected as it had been written into the budget.

Minns should make it clear whether he supports the new tax. It would certainly allow him to get on the front foot regarding gambling policy after the criticism he copped for failing to enunciate meaningful poker machine reform during the election which allowed Labor to be painted as being in the pockets of the gambling lobby. The new tax will be a fillip to government coffers but if it truly threatens The Star’s bottom line and viability, nobody wishes to see casino workers lose their jobs through no fault of their own.

Minns should sit down with casino management and discuss sensible ways of implementing the increase. That is not to advocate lessening the tax rate, but the timetable for introducing the change could at least be finessed to ameliorate the impact.

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