SkyCity Adelaide will pay an additional AU$10.3 million in casino duties to the Treasurer of South Australia after the High Court of Australia ruled against against the company in a dispute over whether loyalty points used for gaming credits should be counted as revenue.
The High Court’s judgement was delivered Wednesday, confirming a previous finding by the Court of Appeal that credits on gaming machines arising from the conversion of loyalty points, when played by customers, are to be included in gaming revenue for the purpose of calculating casino duty.
As a result, SkyCity said it is now obliged to pay additional casino duty of AU$10.3 million to January 2024 in addition to AU$2.8 million of additional casino duty payable due to part of the Court of Appeal’s earlier judgment that was not appealed to the High Court.
The issue of casino duties had been a point of dispute for some time, SkyCity noted, with both parties having previously agreed to seek declaratory relief from the South Australian Supreme Court as to the proper construction of the Casino Duty Agreement dated 27 October 1999 between SkyCity Adelaide and the Treasurer of South Australia.
According to SkyCity, which has already recognized a provision of AU$13.1 million in its FY24 financial results, the amount of interest payable on the outstanding casino duties is yet to be determined by a Supreme Court judge but could at worst lead to penalty interest of up to AU$25.3 million.
“This is a long running matter involving highly technical tax issues regarding the calculation of casino duty,” said SkyCity CEO Jason Walbridge.
“Given the complexities, both parties decided to seek declaratory relief through the court. We look forward to the resolution of this matter and will continue to work with RevenueSA to achieve this.”
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