Star Entertainment Group shares have plunged to their lowest level in more than two years after Treasurer Matt Kean announced tax hike plans on the state’s two casino companies without any consultation.
Mr Kean’s office on Saturday released a one-page press release saying the coalition would increase taxes on what casinos earn from gaming tables and poker machines from July 1.
The tax hikes are forecast to raise an additional $364 million over the next three years, the release said.
“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,” Mr Kean was quoted as saying.
In a statement to the ASX on Monday, Star said it had seen no other details on the tax reforms, including how it would be levied or applied.
“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,” new chief executive and managing director Robbie Cooke said.
“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 per cent, and as high as 80 per cent in the last five years when all the tax regimes are considered.”
The Star said in its statement it was “seeking to urgently engage with the NSW government as to the sustainability of the proposed tax changes and the impact on the Star’s business”.
The casino company has been enacting a number of reforms and remediation, including cashless gaming and slot thailand carded play, after being found unsuitable to hold a casino license in NSW and Queensland following allegations of fraud, money laundering and links to organised crime.
At 1.27pm AEDT, Star shares were down 11 per cent to a two-and-a-half-year low of $2.30.
Crown meanwhile said it would review the proposed tax plan once it was released.
“The impact of these changes will depend on the final details of the tax and other pre-existing arrangements we have in place at Crown Sydney,” said the company.
Crown noted its VIP-only casino in Barangaroo does not have electronic gaming machines or pokies.
The company has already guaranteed the NSW government $1 billion in tax revenue from the casino in its first 15 years of operation.