The High Court of Australia has today ruled in the State Government's favour, dismissing SkyCity's appeal, and ordering it to pay around $13 million in unpaid taxes, an estimated $20 million in interest penalties, plus court costs.
SkyCity and the State Government have been in dispute as to the amount of tax payable under the Casino Duty Agreement (the CDA).
Under the CDA, SkyCity is required to lodge a return each month based on the classification of gaming activities.
SkyCity had contested whether converted credits, which are gaming credits converted from loyalty points earnt by SkyCity customers, should be included in 'gross gambling revenue'.
Today the High Court backed the Treasurer's position, that loyalty points converted to gaming credits, should be recognised as part of 'gross gambling revenue.'
In 2016, Revenue SA's Compliance Services Branch identified that SkyCity credits players' cashless gaming accounts by converting loyalty points into gaming credits, and allowing those credits to be played without recognising them as 'gross gambling revenue.'
The Commissioner determined that because the credits once converted to loyalty points can be cashed out, their use is equivalent to a receipt of cash from SkyCity.
Since July 2018, SkyCity has been fighting the decision through the courts, culminating in its application for special leave to appeal in the High Court in March this year.
As a result of today's High Court decision, the casino duty paid by SkyCity from 2013-14 onwards will be reassessed, including an interest penalty.
As put by Stephen Mullighan
Today's decision confirms that SkyCity must meet its tax obligations to South Australians and that its loyalty points are to be treated as gambling revenue, under the Casino Duty Agreement.
While I welcome today's decision, it is frustrating that SkyCity has engaged in such a lengthy, time-consuming, and expensive legal process.
