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Covid-19 pushes down gaming machine profits in NSW

| By Aaron Noy
The New South Wales Independent Liquor & Gaming Authority (ILGA) has put a year-on-year decline in gaming machine net profit across clubs and hotels in the first half of 2020 down to the impact of the novel coronavirus (Covid-19) crisis.
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Reports from the ILGA are split between the performance of gaming machines in hotels and clubs in the Australian state, over separate six-month periods.

Net profit gaming machines in clubs during the six months from 1 December 2019 to 31 May 2020 amounted to AU$1.21bn (£677.2m/€740.4m/US$869.5m), a drop of 33.2% on the same period last year.

Some 67,982 gaming machines were operational during the six-month period, down slightly from 68,808 on last year, while the number of premises running machines edged down from 1,085 to 1,059.

In terms of gaming machines in hotels, for the six months between 1 January to 30 June, 2020, net profit came in at $829.6, down 33.2% from $1.24bn in the previous year.

The number of machines operating by the end of the reporting period fell from 22,612 to 22,530, while the number of licensed premises also dropped 5.4% from 1,386 to 1,311.

Analysing the figures for both clubs and hotels, the ILGA said that the decline in revenue was due to restrictions placed on venues related to the Covid-19 pandemic, including a 10-week closure period for all gaming venues from 23 March to 31 May.

In response to the restrictions, the New South Wales government in July said it would allow for a deferral of tax payments for the last instalment period. As such, tax figures for the reporting periods are yet to be published. 

Last year, gaming machine tax from clubs amounted to $382.5m, while hotels paid a total of $421.0m.

Other support for gaming venues included an extension of all existing approved payment terms by a further 90 days, as well as a six-month extension to existing approved payment plans contracted over 12 months, two years or three years.

This followed requests from both machine supplier Aristocrat and the Gaming Technologies Association to support customers affected by Covid-19, with the temporary financial arrangements available to hotels and clubs placing new orders up to 30 September this year.

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