The Australian state of Victoria is proposing a tax on Crown Melbourne’s slot machines in the amount of A$22,175 per device.
The annual levy seeks is designed to raise $56.8 million a year to fund infrastructure developments such as roads and schools while allowing the state to maintain its AAA credit rating.
The news sent Crown Resorts Limited (CWN:AX) down by as much as 6% in Sydney on Friday before the stock recovered to close down 4.3% at A$15.90.
Any changes in tax policy between Crown and the Victorian government need to be agreed by both parties. Crown, which is controlled by billionaire James Packer, confirmed that it was in discussions with lawmakers and expects those to conclude early next year. Mr. Packer described them as “positive”.
“Both Crown and the Victorian government would like to see the Crown Melbourne resort continue to grow and to attract more overseas and interstate tourists,” he said.
Crown Melbourne is the biggest contributor to the company’s profits in a soft domestic market that saw operating earnings fall 12% in the last financial year. CWN’s underlying profit was up 14% over the same period, largely due to the success of the company’s Melco Crown Entertainment joint venture in Macau.
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