The NSW treasurer will sit down with casino workers and management of the embattled Star Entertainment Group as he leaves a proposed casino tax rate hike on the table, for now.
The cash-strapped gambling company on Wednesday announced a cost-cutting initiative to slash at least 500 jobs as well as a strategic review of The Star Sydney, Australia’s second largest casino.
The changes are independent of any potential impact from NSW’s plan to increase casino duty rates, which Star has warned would cost more jobs.
The tiered taxation system, with a top tax rate on casino poker machines of 60.67 per cent, would add an estimated $364 million to state coffers over three years.
The previous Perrottet government announced the hike to shore up the state’s financial position amid rising debt.
“That is an issue that I’ve inherited,” Treasurer Daniel Mookhey told AAP.
“We’ve been pretty upfront with the people of NSW – once it’s written into the budget, it has real implications.”
The tax hike, which would need to pass parliament, remained government policy but Mr Mookhey has sought detailed advice about its potential effect on NSW and Star.
The previous management had left “quite a legacy” for the current operators, he said.
“We will be meeting with Star workers next week and we’re looking forward to engaging with the Star management as well to have a dialogue with them about what their intentions are for their business,” Mr Mookhey said.
“Many of these problems were of the making of Star’s previous management team. Star’s current owners need to accept that there’s a long road towards remediation that they’re embarking upon.”
Star’s managing director, board chairman, chief financial officer, chief casino officer and chief legal and risk officer all resigned in 2022 after cultural, regulatory and management issues in the casino group were exposed during a months-long royal commission-style inquiry by the NSW gaming regulator.
NSW and Queensland later found the company unfit to hold a casino licence and each issued a $100 million fine.
Star on Wednesday said it planned to ask for flexible payment terms for the two penalties and the substantial punishment anticipated from financial regulator AUSTRAC.
Its cost-cutting initiatives are expected to reduce more than $100 million in operating expenditure for this financial year.
The board said Star was experiencing a “significant and rapid deterioration in operating conditions”, particularly at its Sydney and Gold Coast casinos, driven by regulatory restrictions and weaker consumer spending.
© AAP 2023
