NSW Government Tax Proposal Causes Drop in The Star Share Value
Following the announcement on Monday of a proposal to raise taxes on casino poker machine operators by the New South Wales Government, shares in The Star Entertainment Group fell by close to 12%. The shares are now at their lowest level since 23 April 2020.
The Australian state’s government is considering changing the gaming tax starting from July 2023 and it would affect the groups’ Sydney operations. The Star Sydney brought in half of The Star’s revenue in the 2022 fiscal year. If the proposed changes are implemented, then they could raise an additional AU$364 million over the next three years.
According to NSW treasurer Matt Kean, the extra money would be used to help pay for vital services, such as recovering from the recent pandemic, bushfires and floods.
It’s important that casinos pay their fair share of tax. These reformed tax rates will replace the existing regime under which casinos pay less tax on poker machines than hotels and clubs. We are not sure how the Government modelled its financials nor the basis for suggesting The Star does not pay its fair share of taxes. Specifically, in addition to state gaming taxes, The Star also pays millions in corporate taxes, with total taxes paid as a percentage of The Star’s profits being around 70%, and as high as 80% in the last five years when all the tax regimes are considered.
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