State gives casino a tax break
The State Government is giving a tax break to Crown Perth so casino mogul James Packer can lure international high rollers away from Singapore's new gambling resorts and back to WA.
Racing and Gaming Minister Terry Waldron will this morning tell State Parliament that the tax Crown pays on profits it makes from so-called whales flown in from abroad will be cut from 11 per cent to 8 per cent.
In return, Crown will guarantee it will pay at least $45.25 million to the State Government over the next five years - well above the $37.4 million it paid over the past five years.
Negotiations between Mr Packer's gaming empire and the Barnett Government began two years ago after Crown watched its turnover from international high rollers fall dramatically.
In 2009-10, big-spending gamblers, mainly from China, gambled $12.4 billion at Crown Perth.
That figure plummeted to $8.2 billion 12 months later as Asian gamblers deserted WA in favour of closer casinos in Singapore.
Crown Perth clawed back its market share but it came at a heavy cost, with huge outlays on upgraded accommodation, jets, a yacht and opulent tours of the State to coax high rollers back.
Crown believes the lower rate of 8 per cent, which, with the Burswood Park Board levy of one per cent, brings the rate to 9 per cent, will allow it to match the incentives offered by casinos in Macau, Singapore and Las Vegas.
Crown Perth pays the WA Government about $120 million a year in tax.
Gaming machines attract about a 21 per cent tax rate and table gambling 18 per cent.
The high-roller levy in Singapore is 8.5 per cent and 10 per cent in Victoria and NSW.
Competition for international high rollers is intense and the whales often demand expensive perks and a rebate on their turnover in return for their custom.
It is a highly volatile market with low margins and one good year by punters can wipe out profits. "Crown Perth is an important economic contributor to WA not only in terms of tax revenue to the State but also employment and business opportunities for thousands of West Australians," Mr Waldron said.
Crown Perth declined to comment. Shadow gaming minister Mick Murray questioned the tax cut.
"It seems strange to be offering a tax break to a casino when the Premier is considering increased taxes and charges for everyone else," he said.
