The Star sees ‘sustainable’ future after casino duty agreement

The Star Entertainment Group’s CEO and managing director, Robbie Cooke, says an agreement in principle with the New South Wales Treasurer over revised duty arrangements will “create a sustainable path forward” for The Star Sydney.

The agreement will see Star now pay a 20.9 per cent levy on poker machines. That will rise to 21.91 per cent next July, with a higher rate of 22.91 per cent only activating from July 2027.

Initially proposed changes to casino duty rates, which were announced last December and were set to be implemented from July 1, were branded “ill-conceived” and put together with “no regard to the capacity of our Sydney operation to afford the impost” by Cooke last month.

The NSW government subsequently delayed their implementation and the revised changes, Cooke added, will help The Star Sydney to “earn back the trust of the community and ensure we remain a valuable contributor to the NSW economy.”

The Star added that the update will help it to “refinance” its debt funding arrangements and that the expected additional duty payable in FY24 is around AU$10m.

Cooke had also said that the initial plans would “put the jobs of up to 4,000 hard working Sydney employees in jeopardy,” but the reworking of the duties “protects our Sydney team’s jobs and the viability of The Star Sydney,” the company said.

The Star said it will also use the changes to trial its cashless gaming machine technology in October this year, on 50 gaming machines and eight gaming tables.

A NSW government statement said that all gaming machines at The Star will be cashless by August 30, 2024.

It added that the new arrangements will see transitional tax arrangements on poker machines apply until July 2030, with the final poker machine duty rates then to be set to the same effective rates as in Victoria.

“If The Star’s financial performance before July 1 2030 is stronger than assumed in its forecasts, adjusted rates will result in the government collecting more taxes,” it said.

The overall casino duty rates, the government continued, are expected to bring in $2.7bn over 10 years from The Star, over $529m more than through the current rates.

NSW Treasurer Daniel Mookhey said: “The government has listened to workers, unions and management and has negotiated an agreement that will protect the jobs of thousands of workers while also seeing The Star pay more duty.

“The previous government’s casino duty hike was unrealistic, poorly developed and put thousands of jobs at risk. It was announced without consultation or consideration for the viability of the business and the thousands of workers they employ.

“The advice I received from NSW Treasury is that absent this agreement, if the government proceeded with the announced rates, The Star would be unviable.

“The Star now also has an opportunity to demonstrate that it has an ongoing role to play in the NSW business community.”