The Star Sydney Casino Gets Slot Machine Exclusivity Until 2041

  • If Crown receives approval to install slots before 2041, Star Entertainment will be compensated
  • Star negotiated a lower tax rate for its casino games at The Star Sydney for the next 20 years
  • Table games will be taxed 29% and slot machines will be taxed at 32% to start, rising to 34% after six years
  • The Star Sydney reopened with limited capacity on Monday after being closed since March 23
Exterior of the Star Sydney casino
Star Entertainment inked an agreement with the New South Wales government to be a monopoly provider for slot machines in Sydney until 2041. [Image: Shutterstock.com]

Big win for Star

Star Entertainment has signed a deal with the New South Wales (NSW) government that will prevent its rival, Crown Resorts, from being able to have slot machines at its new casino in Sydney, Australia until 2041. 

As per the deal, Star will be the sole casino operator in Sydney permitted to house slot machines. If Crown does get the go-ahead from the government to install slot machines before June 30, 2041, Star will receive compensation. The amount of any such compensation has not been announced, and Crown has not made any public comment on the matter. 

it de-risks our business for the next 21 years, which is a great thing”

Star’s chief executive, Matt Bekier, said of the deal: “It guarantees the operating environment for which we’re paying our taxes, and it de-risks our business for the next 21 years, which is a great thing.”

New tax deal

The casino group also secured a new, lower tax rate for its Sydney operations. In the 20-year agreement, the tax rate for table game revenue will be 29% starting in 2022. The rate for slots revenue will start at 32% and increase to 34% after six years. 

Star Entertainment said its average tax rate in 2019 was 31.5%. According to Macquarie analyst David Fabris, the agreement will result in an average tax rate of 30% from 2022 and 2024 and about 31% from 2028 onward.

Though that projection is higher than at casinos in other parts of Australia, it is a better deal for The Star Sydney than what it has had up until now.

Star’s Brisbane and Gold Coast casinos have average tax rates of 25.6% and 26%, respectively. Crown Resorts has an average tax rate of 21% at its Perth property and 26% at its Melbourne casino. 

Casinos reopening

With coronavirus pandemic restrictions starting to ease across Australia, The Star Sydney opened with reduced capacity on Monday afternoon, after having been closed since March 23.

give everybody confidence that you can ease up without it blowing up into new outbreaks”

Seating will be provided to only 500 members of the loyalty club, all of whom must have received an invitation. Once the casino fully reopens, approximately 700 people will be able to return to work. Bekier believes it will take at least a month or two before that can happen, saying: “The way to look at the next month is really just to give everybody confidence that you can ease up without it blowing up into new outbreaks.”