SkyCity, Star Casino and Crown Hit with Major Fines

The Australian High Court orders SkyCity to pay an extra AU$13.1 million in taxes, whilst Star Casino and Crown face large fines for regulatory breaches. Discover the full story here.

The Australian High Court has ordered SkyCity Entertainment Group to pay an additional NZ$14.1 million (AU$13.1 million) in taxes to the South Australian treasury. This follows a dispute over how loyalty points and gambling revenues should be treated.

The Australian casino operator Star Entertainment has also been fined NZ$16.2 million (AU$15 million) by the NSW Independent Casino Commission (NICC), Australia’s regulatory authority. Crown Melbourne is the third gambling operator in Australia to have recently faced a million dollar penalty. The Australian gambling company was hit with a NZ$2.2 million (AU$2 million) fine from the Victorian Gambling and Casino Control Commission for breaching self-exclusion rules. In this article we’ll shed light on the three cases.

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Multi-Million Dollar Fine for SkyCity

SkyCity’s multi-million dollar fine is the outcome of a long-standing dispute over how loyalty points and gambling revenues should be taxed under a 1999 agreement. The disagreement centred around whether customer-earned loyalty credits, which could be converted into gaming credits for pokie machines, should be classified as gambling revenue. Whilst SkyCity argued these credits were not direct gambling income, South Australian tax authorities held the opposite view.

Previously, the South Australian Court of Appeal ruled that these credits were indeed part of gambling revenue and should be included in tax calculations. The High Court has now confirmed this interpretation, requiring SkyCity Adelaide to pay an additional NZ$11.1 million (AU$10.3 million) in taxes, on top of the previously owed NZ$3 million (AU$2.8 million).

The ruling also includes an interest clause, though the final amount has yet to be determined. If the decision turns out to be unfavourable for SkyCity, the interest rate could climb to as much as NZ$27.3 million (AU$25.3 million).

SkyCity CEO Jason Walbridge commented on the complex nature of the tax dispute:

“This is a long-standing matter involving very technical tax issues related to the calculation of casino fees. Given the complexity, both parties chose to seek a declaratory judgement from the courts. We look forward to resolving this matter and will continue to work closely with RevenueSA to reach a solution.”

Jason Walbridge, CEO SkyCity.

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Challenges On the Home Front

This ruling is a tough pill to swallow for SkyCity, especially after the company reported a net loss of NZ$154 million (AU$143.3 million). The company’s financial troubles are explained by CEO Jason Walbridge as the result of a “difficult business environment, marked by a slow economy, rising living costs in both New Zealand and Australia, and multiple regulatory pressures”.

SkyCity is undergoing a transformation to reduce risk, with a greater focus on regulatory compliance. Part of this process includes preparations for the opening of the New Zealand International Convention Centre and new rules for online gambling.

In addition, SkyCity has agreed with New Zealand’s Department of Internal Affairs to temporarily close its Auckland casino due to a breach of its responsibility programme. The closure occurred after a customer was allowed to gamble for more than nine hours straight without any intervention from the staff. The casino was closed from 9 to 13 September 2024.

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Ongoing Pressure on Star Casino

Despite the NZ$16.2 million (AU$15 million) fine, Star Casino Sydney has managed to stay open. Star Sydney has been under scrutiny for a long time, facing investigations, fines, and even the threat of closure.

The problems at Star Casino Sydney have been mounting for years. The company came under investigation after being suspected of ties to criminal organisations from Macau. Suspicions grew when it was revealed that a Chinese billionaire was able to deposit NZ$1.83 billion (AU$1.7 billion) without proper checks. In 2022, an independent commission concluded that Star Casino had failed to prevent money laundering and criminal activity, leading to the suspension of its licence. The company was also hit with a NZ$109 million (AU$100 million) fine.

In late 2023, Star was given a six-month window to prevent its closure. By September, it became evident that a potential major penalty was on the way, with the company facing either a substantial fine or the possible revocation of its licence. Star Entertainment has now been hit with a multi-million dollar fine for its Sydney casino, which will continue to operate under strict oversight. A regulator-appointed manager will supervise operations at Star Casino Sydney until March 31, 2025, after which the authorities will reassess whether the casino can regain its full licence.

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Yet Another Fine for Crown

Between October 2023 and May 2024, Crown permitted 242 self-excluded players to continue placing bets, violating responsible gambling policies. This breach resulted in a NZ$16.2 million fine, adding to a growing list of penalties imposed on the company. The Victorian Gambling and Casino Control Commission has already imposed over NZ$273 million (AU$250 million) in fines for different violations.

Crown Melbourne’s latest fine comes just after the casino operator completed a two-year probation period. In March of this year, regulators allowed Crown Melbourne to remain operational, citing improvements in its conduct. Additionally, Crown Resorts, the company’s parent company, was hit with a massive NZ$58 million (AU$53 million) fine for unlawfully accepting China UnionPay cards. This offence involved facilitating gambling transactions from Asian visitors through unauthorised payment methods.

Make Sure To Read: Crown Resorts Fined Again: NZ $32 million