NSW Bully Tactics Foreshadows a Challenging Future for Online Casinos

The Star Entertainment Group in Australia has been in the news for months due to its transgression of local gambling laws. This ongoing legal trouble saw Star Casino lose its license and incur an AU$100 million fine. This fine is in addition to the AU$7 million it owes the Independent Liquor and Gaming Authority for the cost of reviewing The Star to determine if it should retain its casino license.

 Petulant and Provocative

While no one argues that the operator needs to be held to account for their wrongdoings, the New South Wales (NSW) Government is using this as an opportunity to boost gambling taxes in the state.

Treasurer Matt Kean defends the tax increase in the most asinine way possible, saying:

“If casinos want to lose their social licence, if they want to turn a blind eye to things like money laundering, then the NSW government thinks it’s not unreasonable to expect them to make a small contribution towards floods victims. That’s entirely appropriate.”

The government intends to boost taxes on video slots and table games to support local initiatives aiding disaster recovery, including resurgences in COVID, floods, forest fires and other natural disasters.

The fact that the government is attempting to burden the legal gambling sector with its duty of care is dumbfounding.

Let Sleeping Dogs Lie

The online gambling industry is hopeful that the Australian market will regulate, allowing multi-license offshore casinos to operate legally. However, if boosting taxes on a whim is an example of how they intend to operate, the industry might be better off leaving it a grey market.

To be clear, the increase is no minor consideration. Suppose the NSW Government is granted the new tax level. In that case, local gambling sites will be taxed 60.67% on income derived from poker machines, blackjack tables, roulette tables and many other popular casino games.

These are tax levels that online casinos cannot afford. It could also very well beggar the Star Groups NSW operations. The company's market value dropped 12% due to investor concerns that it could not bear the increased taxes.