Australia’s Crown Resorts Ltd – a joint venture investor in the Macau casino market – has committed to provide “at least” AUD1 billion (US$941 million) in taxes to the New South Wales government in the first 15 years of operation at its planned new resort Crown Sydney (pictured in a rendering).
It was one of the strings attached when Crown on Tuesday passed the penultimate hurdle in its ambition for a Sydney gaming facility.
Crown has been given a so-called ‘Restricted Gaming Licence’ by New South Wales’ Independent Liquor and Gaming Authority. It will allow the company to operate a VIP casino at its planned six-star hotel within a AUD1.5 billion real estate development in the Barangaroo district of the city. It will be allowed to start operating from a date “after” November 15, 2019.
The only other governmental administrative hurdle Crown must now overcome is for the project to get planning approval.
Under the terms of the licence, the gaming permit runs for 99 years. The balance of a AUD100-million licence fee must be paid to the NSW government within five working days.
There are some other strings attached to the licence. No electronic poker machines can be operated at Crown Sydney, unlike at The Star casino operated by Echo Entertainment Group Ltd, currently the only legal casino in the state. Unlike The Star, Crown Sydney will also be reserved for members only, with no access for the general public.
The regulator says smoking will be permitted in the new gaming facility, “provided the international best standard practice air quality equipment is installed, properly maintained and is subjected to regular testing”.
Crown Resorts has also committed to the state government that “during the first 15 years of operation…the state will receive at least [AUD]1 billion in gaming taxes (inclusive of the licence fee)…”
The casino operator has given an additional undertaking that: “… the aggregate of the taxes received by the state (on a normalised basis) from Crown Sydney and The Star in the first three years of gaming at Crown Sydney will be equal to at least three times the gaming taxes received from The Star (on a normalised basis) in the year prior to gaming commencing at Crown Sydney…”
Gaming taxes at Crown Sydney will be non-rebate duty on non-rebate gaming revenue of 29 percent (inclusive of 2 percent Responsible Gambling Levy and the state’s 10 percent Goods and Services Tax). There will be alternatively a 10 percent rebate player duty (inclusive of GST) on rebate gaming revenue.
If the state government amends or cancels the licence for any reason other than “disciplinary action for breach of licence”, or if the state increases gaming taxes “in the first 20 years of operation of Crown Sydney” the operator will be entitled to compensation. The nature of the compensation wasn’t detailed in Crown’s filing to the Australian Securities Exchange Ltd.
“Crown Sydney will help bring additional international and domestic tourists to Sydney, create over 1,200 jobs and generate significant economic growth for New South Wales,” said Crown’s chief executive Rowen Craigie in a statement.
