United Workers Union Speak Out on Pokies Tax Scheme

In December, the NSW government said they would raise duty taxes on casinos. These changes will raise $364 million over three years. The scheme will significantly raise pokies taxes to as high as 60.67% per machine.

Last week, NSW casinos received a surprise ally. The United Workers Union spoke out on the plan and claims that the new tax scheme will cost jobs. The Star has previously stated that the changes in the tax structure could result in a restructuring of its Sydney casino.

United Workers Union Speaks Out on Tax Increase

A report last week from The Sydney Morning Herald shows that the United Workers Union are speaking out against the new tax scheme for NSW. Executive Director Dario Mujkic is criticizing Treasurer Matt Kean for the plan, saying that it will have significant consequences for the casino.

He said Treasurer Kean “hasn’t clearly thought through the potential impact of the proposed tax change on business operations and more importantly the workforce.” Mujkic acknowledges that The Star should face penalties for violations of various regulations. However, he believes that the tax scheme to too harsh and that penalties should not come at the expense of worker jobs.

Mujkic states, “It’s time for the NSW treasurer to sit down and properly engage with The Star and the United Workers Union, repair the damage that has already been done, and agree on a path forward that is reasonable and does not put jobs at risk in any way.”

New Tax Structure Would Impose Up to a 60% Tax on Machines

The new tax structure for pokies at The Star and Crown casinos will begin on 1 July, 2023. There will be slight increases o Non-Rebate Duty Rates and Rebate Duty Rates, accounting for about a 2% increase.

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However, the largest increase is for poker machines. Casinos operating poker machines will pay a tiered tax schedule for each device. Here’s a breakdown of that schedule which is based on monthly net income:

  • Under $2,666 – 0%
  • $2,666 to $6,667 – 46.7%
  • $6,667 to $12,500 – 51.17%
  • $12,500 or more – 60.67%

In the past, the tax rate for pokies was 20.91% across the board. This tax scheme would more than double and, in some cases, almost triple the tax rate. Upon full implementation, the new structure could cost The Star up to $1.6 billion.

United Workers Union Says Tax Scheme Will Have Significant Adverse Impacts on the Casino

While unions seldom focus on the overall profitability of businesses, the reality is that a company has to be profitable to stay open. The United Workers Union is concerned that the new tax scheme will seriously affect the casino’s profitability.

As stated by Mujkic, “If implemented in their current form, the proposed duty rate increase would have a significant adverse impact on the profitability of The Star Sydney.” He then continues, “In this scenario, The Star intends to undertake an urgent review of The Star Sydney’s operating model and assets, with a view to maximizing value for the group’s shareholders.”

For those who don’t speak corporate, the company will do whatever it can to maximize profits. Typically, this results in massive layoffs to cut down on expenses. Part of the Union’s job is to secure jobs for its members. In this case, that includes speaking out against policies that can negatively impact the company’s profitability.

Is There a Middle Ground to Be Achieved?

Unless you’re a hardcore advocate against casinos and gambling, odds are you agree that a virtual tripling of taxes is excessive. We can understand an increase in tax rates, but lawmakers need to be realistic about the amount a casino can absorb and remain profitable.

A flat increase to 30 or even 35% would be much more appropriate than the current scheme. That would serve as both a punishment and a tax boost to the government. Anything more, and the government is risking putting jobs at risk and shutting down a major employer in the region.

Rose Varrelli avatar
Rose Varrelli
Senior Casino & News Writer

Hi there! I’m Rose, and with nine years behind me in the iGaming industry, I craft engaging narratives at CasinoAus. My education in Communication across Europe has sharpened my skills in fintech, casino legislation, and digital marketing. Backed by a strong foundation in SEO, storytelling, and cross-cultural communication, I’m passionate about creating content that resonates globally and educates our audience.

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