The Iemma Government has abandoned its plans for a second casino after the threat of a James Packer led gambling consortium spooked Tabcorp into signing a new 12-year deal.
The owners of Sydney’s Star City casino will pay the NSW government a AUD 100 million upfront fee as part of a deal guaranteeing there will be no new casinos in the state over the next 12 years.
NSW Treasurer Michael Costa this afternoon announced the agreement with Tabcorp had now been reached following extensive negotiations.
The agreement effectively extends the previous 12 year exclusivity agreement with Tabcorp, which expired this year.
„The new agreement with the operators of Star City is a win for NSW taxpayers, a win for the local tourism industry, and a win for punters,“ Mr Costa said.
He said the agreement also includes changes to the tax structures that will provide an estimated 32 per cent increase in casino tax revenue by 2012-13.
The new 12-year deal is effective from November 14, 2007.
„It provides an estimated 32 per cent of additional revenue by 2012-13 on current projection,“ Mr Costa said.
„It gives Tabcorp the certainty it requires for its expansion and refurbishment plans.
„And it maintains the government’s substantial commitment to measures that encourage responsible gambling.“
“The AUD 100 million upfront fee to keep Star City’s exclusivity in NSW and all additional revenue would go towards funding essential services and infrastructure,“ Mr Costa said.
However, it is understood Star City has been forced to accept a high tax regime for the privilege, giving the Iemma Government a multi million gaming tax windfall.
Mr Iemma said this morning revealed he had met with James Packer and former Labor kingmaker Graham Richardson before the election but denied they discussed a second Casino.
„Neither James or anyone else has ever put to me a second casino,“ said Mr Iemma.
However, he admitted he had discussed the issue of on-line bookmaking company BetFair – half owned by Mr Packer – with the pair.