SkyCity ordered to pay additional casino duty

SkyCity ordered to pay additional casino duty

SkyCity must pay an additional AU$13m (US$8.6m) after a court ruled against its interpretation of loyalty programme points in Adelaide.

Australia.- SkyCity Entertainment Group has announced through a company filing that it will have to pay an additional AU$13m (US$8.6m) in casino duty after a judgement by the South Australian Court of Appeal. The dispute stemmed from contrasting interpretations of a 1999 agreement on the taxation of loyalty points accumulated at SkyCity’s Adelaide casino.

The court’s ruling favoured the interpretation of the Treasurer of South Australia. It stipulated that credits on gaming machines resulting from the conversion of loyalty points should be considered in gaming revenue calculations for casino duty. Loyalty points earned through gaming machine play are not eligible for deduction from gaming revenue.

However, the court ruled in favour of SkyCity’s stance on the interest clause in the agreement. The determination of the applicable interest rate for outstanding duty and the enforceability of the contractual interest provision await the decision of Supreme Court judge. If the decision is unfavourable to SkyCity, it may be obliged to pay penalty interest of up to AU$20m (US$13.2m) on the additional casino duty.

SkyCity Adelaide said it is considering the impact on the structure of its customer loyalty programme.

The company recently shared its financial results for the first half of the fiscal year 2024. It posted revenue of NZ$445.2m (US$276m), down 3.7 per cent when compared to the previous year.

Net profit after tax (NPAT) was down 8.5 per cent year-on-year to NZ$66.5m (US$41.23m), while earnings before interest, tax, depreciation, and amortisation (EBITDA) were down 5 per cent year-on-year to NZ$101m (US$62.62m).

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