Crown wants tax cut for high rollers
Shares in Crown slid on Friday after the surprise announcement that Victoria intended to introduce a levy of up to $22,715 a year on gaming machine entitlements at the state's only casino.
But any tax change requires agreement from both sides, and Crown expects negotiations to conclude early next year.
In a statement to shareholders, chairman and 50 per cent shareholder James Packer said: "Both Crown and the Victorian Government would like to see the Crown Melbourne resort continue to grow and to attract more overseas and interstate tourists.
"We look forward to continuing discussions with the Victorian Government to create even more jobs, taxes and economic growth for the people of Victoria."
In announcing the changes in the state's budget update, Victorian Treasurer Michael O'Brien said the casino operator would be required to pay $5500 per pokie machine in 2013-14, rising to $22,715 thereafter.
Similarly, the state announced that pokie machine venues will be slugged via a 4.2 percentage point increase in the two top tax brackets for hotel and club venue operators.
The government also said it would reduce the minimum return to player ratio to 85 per cent, from 87 per cent. In the year to June, the amount punters lost at Victoria's 27,500 pokies outside of Crown fell 7 per cent, reducing an important slice of revenue to the state.
Crown is Victoria's biggest single-site, private-sector employer.
The news caused Crown Resort's shares to slide, although they remain 49 per cent higher in the year to date.
They closed 4.33 per cent, or 72 cents, lower on Friday to $15.90, to value it at $11.6 billion.
Frequently Asked Questions about this Article…
Crown is seeking a tax cut for high rollers in response to the Victorian Government's plan to impose a significant levy on gaming machine entitlements at the state's only casino. This move is part of Crown's strategy to negotiate better terms and continue attracting more tourists and economic growth.
The announcement of the Victorian Government's tax plan caused Crown's shares to slide, closing 4.33% lower on the day of the announcement. Despite this drop, Crown's shares remain 49% higher year-to-date.
The Victorian Government plans to introduce a levy of up to $22,715 per year on gaming machine entitlements at Crown Casino, which is part of a broader strategy to increase state revenue from gambling.
Crown expects the negotiations with the Victorian Government to conclude early next year. The aim is to reach an agreement that supports the growth of Crown Melbourne resort, creating more jobs, taxes, and economic growth for Victoria.
The new tax plan includes a 4.2 percentage point increase in the top tax brackets for hotel and club venue operators with pokie machines, impacting venues outside of Crown as well.
The Victorian Government has reduced the minimum return to player ratio from 87% to 85%, which affects the amount punters can expect to win back from pokies.
Crown is Victoria's biggest single-site, private-sector employer, highlighting its importance to the local economy and job market.
Following the tax announcement, Crown's market valuation decreased as its shares closed 72 cents lower at $15.90, valuing the company at $11.6 billion.
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