| 1 | Initial comment and view
The Star Entertainment Group (SGR) has issued a statement announcing it has reached an in principle agreement with the NSW Treasurer, to amend its duty arrangements with the State. Once finalised, this will serve as an extremely beneficial lifeline for ‘The Star’, which the company says will protect the jobs of thousands of NSW team members at the casino. Back in December 2022, the previous NSW Treasurer indicated an aspiration to increase casino duties by $364m over 3 years, which we estimated could cost SGR circa $100m per year. Today’s statement indicates this will be only $10m. Need to know §What’s happened? After months of discussion, The NSW government has issued a temporary reprieve on poker machine duty rates and less severe rate hikes on non-machine games. - What does it mean? Today’s announcement means that SGR’s gaming tax rates in Sydney are set to change for the following duty rates:
- Rebate play – from 1 July 2023 will increase from 10% to 12.5%.
- Table games – from 1 July 2023 will increase from 17.9% to 20.3% (NRP).
- Poker machines – until 30 June 2030 the current poker machine duty rates continue unchanged (NRP).
- Management commentary: CEO, Robbie said “The formal consultative and structured approach implemented by the Government has enabled an in-principal agreement to be reached which protects our Sydney team’s jobs and the viability of The Star Sydney. While the in-principal agreement will result in an uplift in duties payable to the State, it has due regard to the circumstances of our Sydney business and as such helps to create a sustainable path forward for The Star Sydney. The expected additional duty payable in FY24 is circa $10 million. It is also designed to provide employment certainty for team members in arrangements agreed with the United Workers Union. In addition, it will see The Star Sydney introduce a trial of its cashless gaming machine technology in October this year on 50 gaming machines and 8 gaming tables. 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.”
- SGR will report its FY23 result on the 24th August. The company is yet to provide a trading update.
NSW casino duty rates
Source: Government of NSW, company reports |
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