Star Entertainment shares lift after it strikes tax agreement

The news: Star Entertainment shares have risen 2.8% after the casino owner signed a tax agreement with the NSW government following extended negotiations. The deal has eased concerns about thousands of job losses at Star's casinos, which have been beset with impairments and legal and regulatory costs after money laundering breaches were revealed in 2022.

The numbers: Tax rates for Crown Sydney and The Star casinos will increase from 17.91% to 20.25%, backdated to 1 July 2023. And the NSW government will introduce legislation aimed at protecting more than 3000 jobs at Star's casinos. Gaming revenue exceeding $1.125 billion in a financial year will be taxed at 35%. Star Entertainment shares were trading 2.8% higher at $0.55 shortly before midday AEDT.

The context: Planned tax increases for Star's casinos were announced by the former coalition government in December 2022 with the intention of raising $350 million in revenue over three years. Plans to tax Star poker machines at more than 60% have been reduced to a gradual increase to 51.6% by 2030.

What they said: "The formalisation of these arrangements protects our Sydney team’s jobs and enables us to continue the important ongoing work required to restore The Star Sydney to suitability, and to earn back the trust of our stakeholders," Star CEO Robbie Cooke said in a statement.