The New South Wales (NSW) government has confirmed a series of tax increases for land-based casinos in the Australian state.

Plans for higher casino tax rates in NSW have been discussed for some time. The existing government put forward proposals in December 2022, with the aim of them coming into force in July 2023.

Increases were included in the budget and adopted as legacy policy by the current government at the March election. Then in June the new government released an update saying it wanted to move forward with the plans.

At the time, the company did not confirm the tariffs, but confirmed that it would be in discussions with casinos regarding this. This came after some casino operators, including Star Entertainment, criticized the approach to increasing tax rates.

The government agreed in principle to a shorter interest rate increase in the summer. These tariffs have now been confirmed by the government and will be valid from July 1st this year.

What tax rate should casino operators expect?

The discounted play rate increases from 10.0% to 12.5% ​​and the discounted play rate for table games increases from 17.91% to 20.25%. Both rates are in line with the existing government’s proposals.

The discount-free rates for poker machines (pokies) will initially remain unchanged at 20.91% until June 30, 2030. However, from July 1, 2024 this will increase to 21.91% and from July 1, 2027 to 22.91%.

From June 30, 2030, the tariff will switch to a tiered system. This also corresponds to the previous government’s proposals.

No tax applies to machines with an average poker machine revenue (AMPR) of less than AU$2,666 (£1,398/€1,601/US$1,754). Machines costing between $2,666 and $6,667 are taxed at a rate of 37.6%. Machines in the $6,667 to $12,500 range will be charged a rate of 42.1%, then 51.6% for machines with an AMPR above that threshold.

Slot rates and thresholds may be subject to good faith review between July 1, 2030 and September 30, 2030. This can be requested by casino operators.

The government also confirmed that there will be no changes to the current responsible gambling levy. This remains at a rate of 2%.

In addition, Star has agreed to pay an additional levy. This represents 35% of Star Sydney’s $1.13 billion gaming revenue for each financial year from July 1, 2023 to June 30, 2030.

Star welcomes new tax rates in NSW

Robbie Cooke, Star’s CEO and managing director, reacted positively to the news of higher interest rates. The operator held discussions with the government about this and agreed on the first tariffs in August. Cooke said this would help protect jobs.

“The Star appreciates working constructively with the current New South Wales government on this process,” Cooke said. “Formalizing these agreements protects the jobs of our Sydney team and allows us to continue the important ongoing work needed to bring The Star Sydney back to health and regain the trust of our stakeholders.”

Star has had a challenging time in NSW. In April, Star announced it would begin cost and restructuring initiatives due to a “significant” and “rapid” deterioration in operating conditions in NSW.

The operator has been the subject of several parliamentary investigations into misconduct. In this regard, Star is committed to continuing to work with the New South Wales Government to formalize certain arrangements.

These basic agreements include a cashless and cardless trial game. This is a precursor to reforms to the NSW regulatory framework that will see the introduction of cashless gambling and card gaming in casinos in the state from August 2024.

Additionally, the Star highlighted a fundamental commitment to jobs in NSW. This will maintain the number of employees in the state at a certain level, subject to permitted adjustments and force majeure and material change events.