‘Ill-conceived’: Casino boss slams former treasurer over casino tax

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The boss of Star Entertainment has hit out at the former NSW government following state treasurer Daniel Mookhey’s late-night decision to delay a looming tax hike on the profits from poker machines in the Sydney casino.

The casino group’s chief executive Robbie Cooke accused former treasurer Matt Kean of giving no regard to The Star Sydney’s 4000 employees when he announced the surprise tax increase in December. The proposal would mean profits from The Star’s poker machines would be taxed at a top rate of 60.7 per cent to generate $364 million in extra revenue for the state over the next three years.

Star CEO Robbie Cooke.Credit: Louie Douvis

“This proposed duty increase was policy on the run by the former treasurer, was ill-conceived with no consultation and had no regard to the capacity of our Sydney operation to afford the impost,” Cooke said.

“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.”

The group said in an ASX release on Tuesday morning it appreciated the willingness of the new state government to engage with the business on this issue and said talks “to guarantee the jobs of our team members” continue.

The Star also flagged the process to refinance its existing debt facilities and increase its debt covenants was “materially” challenged by the looming tax hike.

NSW Treasurer Daniel Mookhey revealed on Monday evening the government would delay legislation for the duty rate increase – which would have been imposed on the profits from poker machine and table game earnings from July 1 – until at least August to allow discussions with the cash-strapped casino giant to continue.

The tax increase was due to begin within a fortnight. However, the change was never legislated, even though it was written into the budget. The current tax leveraged from the group’s poker machine profits is less than half this amount.

“The government has been having discussions with the casinos about implementing these new tax arrangements,” Mookhey said on Monday. “To permit these conversations to continue, the government plans to pursue the legislation following the forthcoming parliamentary winter recess.”

The parliament is due to return in early August, giving both sides the chance to negotiate changes to the tax increase.

Mookhey’s statement suggests the government is committed to legislating the tax, but may settle on several changes. One option would be to delay the hike by several years to allow the financially strained gambling giant to stabilise its short-term position free from the pressure of a higher tax burden on its Pyrmont casino.

Kean has been contacted for comment.

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