Star share plummets following NSW casino tax increase proposal

Star Entertainment Group’s share price plummeted by more than 10 per cent on Monday after a proposal from NSW Treasurer Matt Kean to increase the tax rate imposed on the state’s two casinos.

The Star, the only listed casino entity in the state, fell 12 per cent in Monday morning trading.

Kean proposed a raise to the taxes imposed on Crown Sydney and The Star’s flagship Pyrmont casino on Saturday, pledging the additional $364 million generated from increasing the levy on table games and pokies would be channelled into the state’s communities worst affected by the pandemic, bushfires and floods.

Casino poker machines would attract a top tax rate of 60.67 per cent under the proposed increase, which is expected to take effect from July next year. The move would bring NSW into line with taxation rates announced in Victoria’s most recent state budget, which is more than that paid by hotels and clubs.

Star chief executive Robbie Cooke said the group “wasn’t sure” how the state government had modelled its financials, “nor the basis for suggesting The Star does not pay its fair share of taxes” in a release to the ASX on Monday.

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Cooke said in a release to the ASX on Monday that the casino group paid millions of dollars in corporate taxes and that total taxes paid as a percentage of The Star’s profits were about 70 per cent, and as high as 80 per cent, in the past five years.

The Star said it was seeking to “urgently engage” with the government as to the sustainability of the proposed tax changes and the potential consequences for the business.

The group said the proposed changes might affect The Star’s ability to embrace needed gaming reform, including transitioning to cashless gaming and to prove it was ready to retain the coveted gambling licence it lost earlier this year following the Bell inquiry.