According to the latest information released, Crown Perth will be given a tax break.
The reason why the State Government granted the casino such a privilege was the fact that it would enable James Packer to attract high rollers back to Western Australia.
As a matter of fact, Packer’s main goal is to convince the international high rollers that Crown’s facilities are superior to those available in the newest casino resorts in Singapore.
Terry Waldron, the Racing and Gaming Minister is about to notify the State Parliament about the decision, concerning the tax relief. From now on, Crown will be supposed to pay a tax, equal to 8% of the profits, made by foreign players who bet large amounts of money. In other words, there will be a 3% tax relief.
However, Crown has to agree on paying at least $45 million to the State Government within a 5-year period. In comparison, the sum is significantly bigger than what Crown used to pay during the last five years.
Over the past couple of years, the revenue Crown used to generate from foreign high rollers experienced a rapid decrease. The downfall led to the start of negotiations between the Barnett Government and James Packer.
What made the casino mogul so concerned about the revenue was the fact that numbers fell drastically in less than a year. In the period 2009-2010, the turnover was well over $12 billion and it fell to $8 billion YOY. The reason for the dramatic decrease was that Chinese players were those who generated the greatest part of the profit. However, they abandoned the Australian-based casino and opted for the Singaporean ones, which were conveniently located.
Crown managers believe that the tax relief will help the venue resist the tough competition and become as attractive as the casinos, based in Macau, Las Vegas and Singapore.
Crown Perth plays a key role in the annual revenue of Western Australia. It pays the Government approximately $120 million per year. The venue also provides a great number of residents with opportunities for career growth.
There is a fierce competition for international high rollers. The market is believed to be pretty volatile as well. In most cases rich players require the casino to provide them with various bonuses in return for their “generosity” to choose that particular casino.
Managers of Crown Perth remained tight-lipped about their future plans. They also declined to comment the tax cut. However, Minister Mick Murray disapproved of its effectiveness and adequacy. Murray said that ensuring a tax relief for a casino venue when all the other taxes are to be increased, is a strange and prematurely made decision.
