Wilson Asset Management’s portfolio manager John Ayoub said the NSW state government’s backflip adds a new level of risk to any investment. “If retrospective changes to legislated 20-year agreements can be made by the same government,how is any investment safe?” “If the government feels there are shortfalls to make up and a land-grab is warranted,they should still adhere to the agreements of their government” he said.
Wilson Asset Management owns 2.34 per cent of the $2.4 billion dollar casino group and Ayoub said the uncertainty was particularly unfair to retail shareholders.
“The sins of the board and management shouldn’t punish shareholders. I’m really disappointed in this decision,if you want to equalise tax,do it uniformly. Make the same threshold apply to pubs and clubs,” he said.
Under the government’s proposal,casino poker machines would attract a top tax rate of 60.67 per cent,which is expected to take effect from July next year and bring in $364 million. The windfall will be distributed to the state’s areas worst affected by bushfires,pandemic and floods.
The move would also bring NSW into line with taxation rates announced in Victoria’s most recent state budget,which is more than that paid by hotels and clubs.
The proposed tax regime would replace a 2020 agreement with Star,signed by NSW Premier Dominic Perrottet,when he was treasurer,locking in a sweetheart deal until 2041 to save the casino more than $1 billion in tax. That deal has been torn up since Star’s Sydney casino licence was suspended for failing to stem criminal activity and money laundering.