This week, the Victorian government announced its plans to overhaul the way in which local pokies are taxed. The new poker machine levy, which will result in an increase for taxes on Crown Melbourne’s pokies, will raise an additional $50 million for the state. The new levy will only apply to casino pokies. Since there is only one casino in Victoria, James Packer’s Crown Melbourne will have to cough up an additional $56 million every year.
The news of the levy was not well-received by Crown Casino shareholders. Shortly after the news was announced, shares dropped by 5% to $15.94. It seems that shareholders anticipate that the new levy will compromise the casino operator’s revenue, taking money away from profits and putting it into taxes.
So, it comes as no surprise that Mr Packer would want to negotiate a lower tax for the pokies at his Victorian casino location. He is currently in talks with the local government to negotiate a deal. It seems that politicians are receptive, as government representatives have stated that the new levy will depend on the result of negotiations with Mr Packer.
“We look forward to continuing discussions with the Victorian government to create even more jobs, taxes and economic growth for the people of Victoria,” reads a statement from James Packer. The news of the levy increase comes at a bad time for Crown Casinos.
The gaming operator is currently in the process of developing a billion-dollar VIP casino in Sydney, and a steep levy increase in Melbourne could certainly interfere with these plans. Victoria’s new budget also dictates that club and pub owners will have to big steeper pokie taxes. Over the course of four years, the new levy will bring in $287 million. The overhaul will also reduce the player return from 87% to 85%.
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