Crown Is Renegotiating Its $1B Tax Guarantee with NSW

Crown Resorts is renegotiating its 1 billion-dollar (AUD) tax guarantee agreement with the New South Wales government. In 2013, the operator promised to pay at least $1 billion in license fees and taxes  over the 15 years after the opening of its Sydney property.

However, the casino didn’t quite pick up as Crown Resorts had hoped. Amid the pandemic and the severe regulatory hurdles experienced by Crown, the casino continued to struggle, eventually forcing the company to shut down two VIP gaming floors.  The decline of visitation from affluent Chinese tourists and Crown Resorts’ losses didn’t help either.

This caused concerns over Crown’s tax obligations. Under the initial agreement, Crown and The Star were expected to pay three times higher taxes in the first three years since the opening of Crown Sydney than those paid by The Star in the year prior to Crown Sydney’s opening. In addition, Crown is still supposed to contribute at least a billion in gaming taxes over the first 15 years of its property’s operation.  

Because of its ongoing financial hurdles, Crown is currently renegotiating its tax obligations with the NSW government. This was confirmed by NSW Treasurer Daniel Mookhey, who was unable to reveal more at this time.

Premier Minns Says Crown Should Honor Its Deal

Premier Chris Minns is unamused, however, saying that Crown secured the casino site for next to nothing thanks to the $1 billion tax deal. Because of that, he slammed Crown Resorts for seeking further relief. Minns pointed out that the company’s demand is “really an insult to all Sydneysiders.” He said that if Crown cannot honor its deal with the people of New South Wales, it should hand the land back.

Despite his pessimism about Crown’s demands, Minns said that his team was obliged to hold negotiations about tax scales and tax arrangements to the state. However, he noted that people “shouldn’t jump the gun” and presume that these negotiations will necessarily lead to an actual net reduction in tax take for casinos in the stake.

Minns added that he does not intend to have public negotiations with casino companies. He added that any potential changes to tax rates will be announced publicly.

In other news, Star Entertainment recently struck a tax relief deal in NSW, reaching a concession on casino duty rates with the government after criticizing the duties earlier this year.