It has been a tumultuous time for the gambling industry in New South Wales already, but for casino operators it could get even worse with the State Government proposing major changes to casino tax rates.
Aiming to take another shot at Australia’s second largest casino operator, Star Entertainment Group (ASX: SGR) has been the target of the NSW Government which is attempting to introduce a $364 million casino tax increase over the next two years.
This extra amount will come from what is formally known as “point-of-consumption” taxation, which has been implemented across multiple Australian states and territories.
The response for government bodies follows research that uncovered the growing threat of gambling addiction amongst Australians, as many of the games we play and love have the same themes that trigger the parts of the brain, similar to a poker machine and provides an easier pathway to addiction.
Games that purposely attempt to mimic gambling machines have been geared to inflate payout rates to give the user a false sense of winning, the same sense that is felt after winning on a poker machine – unfortunately for some, as per its predatory design, this has led them down an all too familiar road.
Research conducted by Monash University showed that Australians lost more than $11.4 billion on poker machines in FY22 despite COVID-19 lockdowns, with the average user losing about $2,800 — except in NSW, where they lost $4,500.
This issue continues to pin itself across Australia, but the recent NSW election showed that there are paths to walk for a better future for problem gamblers. Demonstrating the strength and resilience of NSW voters, nearly 60% of respondents supported introducing mandatory cashless gaming cards as a solution for poker machine venues across the state.
Government intervention began following the Crown Casino (ASX: CWN) uproar that produced a Royal Commision that exposed widespread corruption and money laundering within the business and across Australasia.
Investors in Star Entertainment have felt the brunt of the Company’s misdeeds, seeing SGR shares plummet dramatically on open following the announcement of the potential reforms. Amounting to nearly 15% on Tuesday alone–on what was already considered a volatile stock, signals an uncertain future for shareholders who may now be considering what lies ahead.
Trading Desk Assistant at Emerald Financial
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