Star had argued the increase – announced by the Perrottet government and doubling the poker machine tax paid by the company – would have left its NSW operations “uneconomic”. Treasury analysis backed that claim,saying the impost would have left the company “unviable”.
The threat to the future of The Star is real.Steven Siewert
It was,in some ways,an explicit concession the government does not want the Pyrmont casino to fail.
The opposition argued it was a case of the government letting the company off the hook just months after the high-profile Bell inquiry found that led to money laundering,criminal infiltration and large-scale fraud.
But it was not just Star lobbying the government to drop the tax. The United Workers Union had also argued against the increased duty. The union argued it would have ultimately been its members who were punished as a result of job losses.
Which is how the government framed the decision to delay the increase. The transition package that Mookhey announced — which still increased the overall duty and contains ratchet mechanisms that would see it increase alongside Star’s profits — tied the company to certain conditions. Chief among them was a requirement Star’s during the life of the agreement.
But the announcement on Monday by NSW Independent Casino Commission chief Philip Crawford that the beleaguered company would be subject to a second inquiry into its practices raises a new and vexing question for the government:does the government continue to support a workforce,even if its employers are repeatedly found to be unfit to operate?
Whichever way you spin it,Monday’s announcement is a devastating blow and could conceivably lead to Star having to close its casino in Sydney.
As Crawford told my colleague Amelia McGuire,there are essentially four options open to him upon receipt of a second inquiry by Adam Bell,SC,into Star Sydney’s conduct since his first damning report in 2022.
Two of them would spell the end of Star’s casino operations in Sydney. The regulator could retire the special manager,Nicholas Weeks,whom it first appointed to oversee the casino’s operations at the end of 2022 and whose term it has already extended on three occasions,and close the casino business. It could also decide to cancel Star’s licence altogether.
The second Bell Inquiry could also choose to extend Weeks’ term again,or it could find the Star has in fact turned a corner and is a suitable operator.
But if the Star were to lose its licence,it is unlikely there would be a government parachute. Any kind of transition package for casino workers seems unlikely,as does an intervention to prop the casino up.
It’s hard to believe,but it was only a few years ago that Star Entertainment had cultivated an image of itself as the cleanskin casino company. Compared to its scandal-plagued rival Crown,the Sydney casino operator appeared to be a model of corporate compliance. It even toyed with a potential purchase of Crown back in 2021.
At that time,it would have seemed far-fetched to suggest its casino in Sydney might fold. But that now presents itself as a very real possibility.
