NSW Government Has Been Facing Criticism Recently Over Its Plans to Increase the Tax Rate

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In response to criticism from the gambling industry about the lack of consultation, the NSW government has defended a proposed tax rise on poker machines and table games in the two casinos in the state.

The government’s decision to press forward with the plan, scheduled to start in July 2023, was hailed by Treasurer Matt Kean on Friday as “entirely appropriate.” Over the following three years, the initiative is expected to raise $364 million for disaster-affected areas.

“If casinos want to lose their social licence, if they want to turn a blind eye to things like money laundering, then the NSW government thinks it’s not unreasonable to expect them to make a small contribution towards floods victims. That’s entirely appropriate,” Kean said at a press conference on Friday.

After Kean revealed the idea last week, The Star—which holds most of the state’s market share for table games and has exclusive rights to poker machines—saw a decline in value of more than $600 million.

Earlier this week, the idea drew criticism from investors, analysts, and other business leaders, some of whom claimed the action increased concerns about sovereign risk.

In a statement, The Star’s chief executive Robbie Cooke criticised the proposed rise in taxes, saying the company “wasn’t sure” how the state government had modelled its financials and “nor the basis for concluding The Star does not pay its fair share of taxes.”

The NSW Independent Casino Commission (NICC) decided on December 16 that the troubled casino firm should pay its $100 million fine as a result of the findings in three instalments: $30 million by March 31, $30 million by June 30, and the last $40 million by December 29.

By the end of the next month, The Star will also cover the $7 million in costs incurred by the Independent Liquor and Gaming Authority (ILGA), a former state regulator.

For now, these new tax increases are going ahead as planned. Whether or not this harms employment in casinos remains to be seen.

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