NSW government’s rejection of tax relief for Star is right decision

After doing all it could to protect Star’s Pyrmont casino, the apparent refusal by the Minns government to throw a financial lifeline to the floundering Star Entertainment Group was a tough but politically astute decision.

No matter how Star Entertainment phrased their plight, Macquarie Street rightly felt it could not avoid feeling the NSW money would end up north of the border to help Star’s expansion in Queensland, where last week it opened a third Australian casino in Brisbane’s $3.6 billion resort precinct Queen’s Wharf.

A NSW government spokesman said it was the responsibility of the group to maintain the financial viability of its business. “The NSW government’s assessment is that any NSW taxpayer assistance would primarily support the Star’s Queensland expansions,” a spokesperson for the Minns government said.

Star Entertainment is in emergency talks to avoid a corporate collapse. Last Friday, for the second time in two years, an independent inquiry by high-profile barrister Adam Bell SC found the Sydney casino unfit to hold a licence and, with its reputation shredded, the casino operator is scrambling to access short-term debt.

Star has been hit by a two-year delay and cost blowouts associated with its Queensland expansion and was scheduled to release its annual results last Friday, but reneged in the face of Bell’s damning report. Those results have now been delayed indefinitely amid the unfolding crisis, with the ASX suspending the company from trading on the stock exchange.

In Sydney, governments over the years have been extraordinarily kind to The Star and its previous iterations, Sydney Harbour Casino and Star City Casino. Ever since 2000 when it was caught allowing a banned convicted heroin dealer Van Duong to turn over $94 million on gaming tables, years of corrupt activity continued with money laundering rife and business deals done with overseas organised crime gangs. Sometimes multimillion-dollar fines were paid. Royal commissions and inquiries and their recommendations were largely ignored. Not one criminal charge has ever been laid.

But governments bent over backwards to help. Only last year the Minns government delayed the imposition of additional taxes that had been on the drawing board, and also wound back the previous Perrottet government’s commitment to have cashless gaming by 2028 and opted for a trial instead.

Meanwhile, given that Australians are happy to lose $25 billion a year on legal gambling, it stretches credibility that a monopolistic organisation with such ready access to private incomes like Star needs to cry poor to the public purse to maintain profits.

The group currently employs some 3000 people in Sydney, and another 1400 in Brisbane (with another 1500 jobs promised). But with an October state election, the Queensland government is under pressure to bail out the new casino. The Minns government is under no such political imperative, and there is certainly no reason the taxpayers of NSW come to the casino giant’s aid.

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