Australia’s Star Entertainment Group has signed a new 20-year agreement with the NSW Government which will see it pay a flat 29% tax rate on domestic mass gaming revenues while enjoying ongoing exclusivity in the Sydney casino market to operate Electronic Gaming Machines.
Under the terms of the new agreement, Star will continue under its current tax arrangements through to the end of the 2021 financial year on 30 June 2021, during which time a 27.5% tax on domestic mass GGR for revenues up to AU$780 million will apply, scaling upwards on revenues above that amount. The Star Sydney recorded domestic revenues of AU$991 million in 2019, resulting in an average tax rate of 31.5%.
From 1 July 2021 onwards, a flat 29% tax rate will be applied to domestic mass table revenue – the same as will be applied to Crown Sydney upon opening next year – while EGMs at The Star will be taxed at 32% between 2022 and 2024, 33% from 2025 to 2027 and 34% for the 14 years thereafter. International and domestic VIP revenue will continue to be taxed at a flat rate of 10%.
However, with Crown positioning its new development in Barangaroo as a high-roller venue, The Star Sydney will remain the “exclusive casino provider of EGMs in the two casino Sydney market” and “entitled to financial compensation from the NSW Government should EGMs be installed at Crown Sydney at any time until 30 June 2041.”
It will also be entitled to compensation if there are changes to other key regulatory arrangements including the permitted number of gaming units. There is currently no cap on tables or multi-terminal gaming machines, and a 1,500 cap on EGMs.
The new agreement comes on the same day as The Star Sydney partially reopened for business following its 11-week closure due to COVID-19 restrictions. Star announced over the weekend that it was reopening its private gaming rooms and up to 12 food and beverage venues within the casino areas from Monday, limited to a maximum 500 loyalty club members on an invitation-only basis.
