The baseline guarantee says that over the first 15 years of Crown’s full operations – “after a ramp-up period of approximately two years” – NSW will receive at least $1 billion in gaming taxes, including the $100 million licence fee paid upfront.
That agreement also stipulates that NSW will compensate Crown if “certain adverse regulatory events occur” during the life of its licence, or if gaming taxes are lifted within its first 20 years.
Mookhey’s office referred our questions to Treasury, which did not provide direct answers but confirmed: “NSW Treasury is currently in negotiations with Crown about its tax obligations and will comment at the appropriate time.”
Crown Resorts did not answer questions directly, but a spokesperson said: “Crown Sydney has regular, ongoing dialogue with the NSW government about a number of topics that affect its business and industry.”
In August, Mookhey announced a reprieve for the troubled Star Sydney casino, which was facing higher duties on poker machine profits under changes made by the former Coalition government.
Mookhey instead introduced a transitional arrangement that delays the higher tax rate until 2030. Star, which Mookhey said would be “unviable” if the tax hike had proceeded, agreed to maintain more than 3000 jobs and participate in a cashless gaming trial.
Those negotiations were led by veteran governance and infrastructure figure Ron Finlay, who also represented the government’s Barangaroo Development Authority in its battle against Crown and Lendlease over so-called “sight lines” from their towers over Central Barangaroo.
The government would not confirm if Finlay was leading the negotiations with Crown, but when asked about the matter Finlay said: “I’m not at liberty to discuss that.”
In 2013, a Commonwealth Bank analyst predicted it would “be very difficult for Crown to make a reasonable return” on the Barangaroo casino given its capital outlay of $1.3 billion.
At the time, Packer said he was “humbled” by the deal, which would bring Sydney a landmark architectural icon and one of the world’s great hotels.
The casino would also lure “Asian high net worth travellers to Sydney, in particular from China, creating economic growth, extra taxes and over 1200 jobs for the people of NSW”, Packer said.
However, with COVID-19 and the downturn in international tourism, Crown has told the government 90 per cent of the Sydney venue’s visitors are domestic, not international, along with 95 per cent of casino members.
Revenue at Crown Sydney grew to $271 million last financial year, but it was still well below its Melbourne flagship ($1.4 billion) and Perth casino ($854 million).
https://www.brisbanetimes.com.au/national/nsw/struggling-crown-seeks-rewrite-of-1-billion-nsw-tax-contract-20231031-p5egbk.html?ref=rss&utm_medium=rss&utm_source=rss_national Crown seeks rewrite of $1 billion NSW tax contract