Media Releases

Media Releases

Tabcorp secures 12-year exclusive licence agreement for Star City

Published: 30 October 2007


Tabcorp Holdings Limited today outlined an in-principle agreement with the NSW Government which will extend Star City’s exclusivity rights for a further 12 years.

Tabcorp’s Chief Executive Officer Elmer Funke Kupper said the agreement will allow the company to proceed with plans to invest approximately $300 million in Star City to make it one of the State’s premier tourist destinations and a top entertainment venue in Australia.

Under the agreement, Star City will pay the NSW Government $100 million in two tranches over the next 18 months and move to a new indexed tax regime based on the combined revenue from table games and slot machines.

The new tax structure will be phased in gradually over five years from 1 July, 2008 with minimal impact to Tabcorp in 2008/09. The current average tax rate of 24.1 per cent will rise to 27.5 per cent in 2013, based on today’s revenues.

The agreement also provides for a number of product changes that will make Star City a more attractive Casino destination, including:
· Agreement to increase the number of table games at Star City with Casino Control Authority approval
· Re-classifying multi-terminal gaming machines as tables
· Lifting bet limits on multi-terminal gaming machines
· Higher jackpots for Star City’s gaming machines
· Lifting bet limits on high roller gaming machines
· Various regulatory changes to enable Star City to compete on an equal footing with other casinos in the high roller market. This includes the introduction of a rebate program for domestic high rollers.

Mr Funke Kupper said the agreement would provide benefits for the NSW Government, the community and Star City. He said the $100 million payment will be made in two $50 million tranches – one this financial year and one in 2008/09.

“No company likes to pay higher taxes and this agreement means Star City will clearly be the highest taxed casino in Australia,” he said.

“However, the Government’s package gives Star City the opportunity to be competitive in both the international and domestic markets.

“The extension of Star City’s exclusivity rights until 2019 gives us the certainty that we need to invest in a major redevelopment of the casino and hotel complex.

“Tabcorp will spend approximately $300 million redeveloping Star City into Sydney’s top tourism and entertainment area and one of the best entertainment venues in Australia. Our proposed redevelopment will include a new 300 room hotel and the creation of a new restaurant precinct overlooking Sydney Harbour and the city skyline.

”This investment will create hundreds of jobs, provide a real boost to the NSW economy and ensure Sydney gets the world class entertainment venue it deserves.”

Star City attracts around 22,000 visitors a day and employs about 3,000 people.

The complex includes 350 hotel rooms and 130 apartments, a main gaming floor, private gaming room, 2000 seat Lyric Theatre, 1200 seat Star Theatre, ballroom, conference facilities, 13 restaurants and bars and a retail arcade.

Mr Funke Kupper said Tabcorp recognises its obligations in the area of responsible gambling, and will continue to be a leader in this area. Tabcorp has again been recognised this year as a global leader in responsible gambling by the Dow Jones Sustainability Index. “Tabcorp understands the importance of responsible gambling in our community,” he said.

For more information contact:

Peter Grimshaw
Government and Media Director, Star City 02 9657 7643 or 0411 110 688

Bruce Tobin
Group General Manager Corporate Affairs, Tabcorp 03 9868 2508