Photo: 123RF / Andrey Moisseyev
The High Court of Australia has ruled against SkyCity Adelaide in a disagreement over the tax treatment of customer loyalty points used in its gaming machines.
The decision on the long-running dispute with the Treasurer of South Australia means the points were gaming revenue and subject to a casino duty of about $14 million (A$13.1m as of 30 June), plus interest to be determined by a single judge of the Supreme Court of South Australia at a later date.
"This is a long running matter involving highly technical tax issues regarding the calculation of casino duty," SkyCity chief executive Jason Walbridge said.
The penalty could leave SkyCity Adelaide with a tax bill of as much as A$25.3m as of 30 September, with A$10.3 million already provided for in its 2024 financial statements.
"Given the complexities, both parties decided to seek declaratory relief through the court," Walbridge said.
"We look forward to the resolution of this matter and will continue to work with RevenueSA to achieve this."
However, Forsyth Barr head of research Andy Bowley said this was not spell the end of the company's challenges in Adelaide, as the South Australian government is yet to consider whether SkyCity is fit to hold a casino licence.
Bowley said SkyCity could be facing a steep fine and operating restrictions depending on the outcome of the state government's ongoing investigation.
"One-offs in this context can be quite material in relation to the fines that have been levered against casinos in this part of the world over the last several years, but we tend to look at the underlying aspects of the business which really reflect the operating environment, the cyclical issues impacting consumers, etc... and how that manifests itself in financial performance," Bowley said, adding the improvement in the economy and upcoming peak tourism season would help SkyCity.
However, he said the underlying risks remained.
"From here, there are a number of other moving feasts for for the company you know, not least some of the restrictions on gaming activity which will come into play over the course of the next 12 to 18 months.