Star CEO Criticizes NSW Govt Tax Hike Proposal As Share Prices Tumble
Summary
- The NSW government confirmed plans to impose higher taxes on casinos
- Star Entertainment said the government did not conduct a consultation on the proposal
- The Star’s share price dropped by 15 per cent following the announcement
Newly-appointed Star Entertainment CEO Robbie Cooke slammed the new casino tax increase proposal announced by the New South Wales (NSW) government in Australia. Cooke is not in favor of the proposal, maintaining that The Star has been paying its “fair share of taxes”.
He also lamented the lack of consultation from the government on the planned tax increase, saying they have yet to receive any information as to how the taxes would be imposed.
In a statement to the ASX, The Star said it would seek to “urgently engage” with the government regarding the sustainability of the proposal and its potential impact on casino businesses. The Star argued that it contributes around 70% of its profits to the government when all the tax regimes are taken into account.
Meanwhile, Crown Resorts, which is now owned by American private equity firm Blackstone, said it would review the proposed tax changes, adding that the impact of the reforms will depend on the final details of the proposal and other pre-existing arrangements at Crown Sydney.
Star Shares Fall after Tax Hike Announcement
Star Entertainment Group suffered a 15 per cent drop in share price on December 19, 2022, after the New South Wales (NSW) government announced plans to increase casino taxes. The proposal seeks to collect an extra $364 million in taxes over the next three years from Sydney’s two casinos operated by Star and Crown. The funds will be used for recovery efforts in communities badly affected by COVID-19, floods, and bushfires.
Star shares tumbled 15 per cent to $2.15 after NSW Treasurer Matt Kean provided details of the tax increase proposal to the media on December 17. The tax hike will be imposed on revenue generated from table games and poker machines at casinos. It is set to take effect from July 1, 2023.
Troubles Continue for Star
The proposal is the latest blow to Star Sydney which was handed a record fine of $100 million back in October over breaches of anti-money laundering laws. Its license has also been suspended indefinitely. The company is currently undergoing remediation in a bid to win back its gaming license, with the entire process costing the casino operator up to $45 million.
Star’s shares have already plunged by 40 per cent over the past year owing to allegations of criminal activity and money laundering which led to the launch of an independent inquiry into the group’s Sydney casino operations. The investigation, headed by Adam Bell SC eventually found The Star unfit to hold a license in NSW.
David WalkerAuthor
David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player
