Star Entertainment Drops Following NSW Government’s Proposal to Reform Casino Tax Rates By Reuters

Shares in Australia’s Star Entertainment Group experienced a decline of nearly 12% on Monday following the New South Wales (NSW) government’s proposal to increase taxes on casino poker machine operators in the state, set to take effect in July next year.

These potential changes to gaming taxes could significantly impact Star’s operations in Sydney, which accounted for half of the company’s revenue in fiscal 2022, as outlined in its annual report. If the proposed changes are enacted, they could generate an additional A$364 million (approximately $243.63 million) over the next three years.

NSW Treasurer Matt Kean stated that the funds raised from the tax increase will be utilized to support crucial services, particularly in helping communities bounce back from the effects of COVID-19, wildfires, and floods.

This announcement aligns with broader reform efforts within Australia’s gambling industry, which has faced serious criticism for issues related to anti-money-laundering regulations, troubled governance, and inadequate corporate culture.

In response to the government’s proposal, Star Entertainment Group released a statement indicating that it had not been consulted regarding these tax changes. The company expressed a desire for urgent dialogue with the NSW government to discuss the sustainability of the proposed tax and its potential impact on the business.

The company’s shares fell to their lowest level since April 23, 2020.