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The NSW government is hardening against any reversal of Crown\u2019s $1 billion tax guarantee signed 10 years ago when it secured the rights to the Barangaroo development, with Premier Chris Minns saying he was obliged to negotiate with the casino but no more.<\/p>\n
Separately, two senior government sources, speaking on condition of anonymity as the talks were ongoing, said Labor would not accede to Crown\u2019s request to pay less tax and was prepared to legislate to bind Crown to its agreement.<\/p>\n
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Crown argues it is suffering from regulatory changes and a sustained lull in international high-rollers, partly as a result of COVID-19.<\/span>Credit: <\/span>Dominic Lorrimer<\/cite><\/p>\n However, a 2014 deed between the government and Crown indicates taxpayers may be compelled to ensure the casino is not worse off because of gaming tax changes or the COVID-19 pandemic.<\/p>\n The Herald<\/em> revealed on Wednesday that Crown was in talks with the government to rewrite the terms of its 2013 deal, which committed the Sydney casino to paying at least $1 billion in gaming tax over the first 15 years of its full operations.<\/p>\n Treasury confirmed it was \u201cin negotiations with Crown about its tax obligations\u201d, but Minns said on Wednesday nobody should assume that would result in the government collecting less tax from the casino.<\/p>\n \u201cAs part of the agreement that was signed by the previous government with casinos in NSW, we\u2019re obliged to have \u2013 in fact, we have to have \u2013 negotiations about tax scales, tax arrangements to the state,\u201d Minns said.<\/p>\n Premier Chris Minns said he would not get into a public negotiation with Crown over its long-standing tax guarantee.<\/span>Credit: <\/span>Jessica Hromas<\/cite><\/p>\n \u201cPeople shouldn\u2019t jump the gun and presume it\u2019ll mean a net reduction in tax take for casinos in the state. But I\u2019m not going to have a public negotiation with these casinos. If we have a change to those tax rates we\u2019ll announce them publicly.\u201d<\/p>\n A common terms deed between the government and Crown, dated July 8, 2014, stipulates Crown and the government will negotiate in good faith to amend the tax guarantee so that Crown is not worse off due to a \u201ctrigger event\u201d or \u201cforce majeure event\u201d.<\/p>\n A trigger event includes any change to the agreed tax regime for VIP gaming (Crown Sydney does not have poker machines), while a force majeure event includes an epidemic.<\/p>\n Independent MP for Sydney Alex Greenwich, who opposed the Crown project and called it \u201ca blight on our city\u201d when the casino floor opened last year, said the government should reject any changes to the tax guarantee.<\/p>\n \u201cCrown got the site for next to nothing based on a deal that they would continue to provide tax revenue to the state. For them now to cry poor is really an insult to all Sydneysiders,\u201d he said.<\/p>\n \u201cThe reason their bottom line is being impacted is that they are no longer able to have money laundered through their casinos, and they are no longer able to accept the proceeds of crime being gambled through their casinos.<\/p>\n \u201cThat is not a legitimate reason for now needing a further tax break. If they can\u2019t honour their deal with the people of NSW, they should hand the land back.\u201d<\/p>\n That land is now home to Sydney\u2019s tallest building, containing Crown\u2019s luxury hotel, the casino, restaurants and residential units.<\/p>\n In return for the right to develop the site, Crown agreed to pay a $100 million upfront licence fee and contribute at least $1 billion in gaming revenue over the first 15 years of the casino\u2019s operation.<\/p>\n The Minns government threw The Star a tax lifeline earlier this year.<\/span>Credit: <\/span>Bloomberg<\/cite><\/p>\n Crown now argues the economic and regulatory situation has changed, and it is suffering from a sustained lull in international high-rollers, partly as a result of COVID-19.<\/p>\n Former Liberal premier Barry O\u2019Farrell, who announced the deal in 2013, declined to comment, as did successor Mike Baird. Crown was also contacted for comment.<\/p>\n In August, Treasurer Daniel Mookhey announced a reprieve for rival casino the Star Sydney, which was facing higher duties on poker machine profits under changes made by the former Coalition government.<\/p>\n He instead introduced a transitional arrangement that delays the higher tax rate until 2030. Star, which Mookhey said would be \u201cunviable\u201d if the tax hike had proceeded, agreed to maintain more than 3000 jobs and participate in a cashless gaming trial.<\/p>\n The Business Sydney lobby group urged the government to keep negotiating with Crown, saying the tax reprieve for Star was necessary. \u201cIt makes just as much sense to ensure Crown can also operate successfully\u201d.<\/p>\n \u201cTheir contribution to tourism is important with Sydney yet to recover pre-COVID international visitor numbers,\u201d executive director Paul Nicolaou said. \u201cWe need more international visitors to return.\u201d<\/p>\n Start the day with a summary of the day\u2019s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.<\/i><\/b><\/p>\n<\/p>\n
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