Aussie Pokie Pub Palace Kings Cash In Tax Cuts, by Greg Tingle - 10th June 2010

Down under in Australia the Aussie pubs have more to say cheers to and celebrate, as the gaming industry remains under the spotlight. Media Man and Gambling911 probe the pokie bean counter inc...

Aussie hotels and pubs aka "pokie palaces" owned by some of Sydney's must cashed up pub tycoons won't have to pay tax or have their tax bill cut on poker machine profits following an overhaul of sorts to gambling taxes in the state budget, which the industry has celebrated as "a result of historic proportions.

The government is calling the changes as a "rescue package" for small country pubs, but Fairfax Media is stating that the upmarket Beresford Hotel in Sydney's Surry Hills, bought by the multimillionaire Justin Hemmes just two months ago for $14.6 million, is among 485 pubs that will no longer have to pay tax on gambling profits. Jackpot Bingo!

A tax-free threshold of $200,000 will apply to pokies profits for five years from July 1, mixed in with a new taxation scale. The changes mean 1100 NSW pubs - or 65% will either end up paying no tax or significantly less.

The Beresford's pokies profits are only about $50 grand... so its annual gambling tax bill will be trimmed to Nil... bonus. American and European clubs and casinos are following the Aussie gambling tax cuts with keen interest.

A spokesman for the Hemmes family company, Merivale Group, said "Merivale controls or owns eight venues with poker machines, one of which is the Beresford Hotel. The Beresford is the only venue of the eight not required to pay tax, leaving seven of the eight paying tax. As a group, Merivale is paying more tax as a result of the changes.".

Calculations passed to Fairfax Media, that Media Man got across demonstrate pubs with gambling profits of up to $700,000 will have annual savings of between $2473 and $27,543.

The Captain Cook Hotel located on Sydney's Flinders Street and owned by the developer Matthew Lepouris, has a pokies profit of about $400,000. The hotel's tax bill will be cut by about $11,000.

The Royal Hotel at Paddo, owned by the Kelly family, and the Bristol Arms on Sussex St, owned by New South Wales largest hotel owner, National Leisure and Gaming, will pay less tax.

The NSW president of the Australian Hotels Association, Scott Leach, celebrated the move in an email to members earlier this week.

"The AHA NSW has successfully lobbied the NSW government to guarantee future gaming tax rates and deliver an immediate tax cut to 65 per cent of NSW hotels," he wrote. "This is a result of historic proportions for the industry following speculation last year the government was seriously considering increasing hotel tax rates."

Insiders say the "deal" was brokered by John Whelan, a former chief-of-staff to the former minister for gaming and racing, Grant McBride, who these days works for the AHA. Ah, relationships, history and networking matters.

Whelan declined to discuss his role in securing the tax changes. The AHA did not return calls.

Media Man and Gambling911 think the situation shows that lobbying can still work with government, when done in a (Legal) "Casino Jack" fashion. Gambling911 and MM pass on our congrats to the pub barons and the NSW government on coming to business terms that suit both parties.

Punters, as always, know the odds, bet with your head, not over it, and have fun.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. Gaming is just one of a bakers dozen of sectors they cover.

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