Taxation on takings from electronic gaming machines in Tasmania's casinos will drop by 57 per cent if the government's new gaming legislation is approved by Parliament.
The government released draft gaming legislation on Wednesday which will end a monopoly on EGMs held by Federal Group for the last 25 years.
From July 2023, individual venues will be given control over poker machines.
Premier Peter Gutwein said the legislation would return more revenue to the state, more money to pubs and clubs, and less to the Federal Group.
He said there would be more revenue to the government to fund essential services and would provide job certainty for those employed in pubs and clubs.
"At the same time, there'll be more support for problem gamblers," Mr Gutwein said.
Under the draft legislation, the taxation rate on EGMs in hotels will go from 25.8 per cent to 33.9 per cent to bump up government revenue to $34.4 million a year.
The tax rate on club EGMs will rise from 25.8 per cent to 32.9 per cent.
The Community Support Levy will rise from $54.6 million to $63.1 million - an $8.5 million difference.
Fifty per cent of this money goes towards addressing problem gambling in Tasmania.
Finance Minister Michael Ferguson said it was a difficult day for the Federal Group. He said the tax cut for the Federal Group was based on Treasury advice and was consistent with a benchmark for casinos in northern Queensland.
Mr Ferguson would not commit to releasing the economic modelling on which the government's policy and draft legislation was based.
Nelson independent MLC, and anti-pokies campaigner, Meg Webb said based on information released by the government, the tax rate on EGMs in casinos represented a drop from 25.8 per cent to 10.9 per cent when the 3 per cent Community Support Levy was removed from the equation.
She said it appeared the industry got all that it wanted from the gaming reform in the end.
"That should never have been a priority for the government," Ms Webb said.
"The priority of the government should have been through this reform how the best financial outcomes for the state and the best social outcomes in terms of harm and impact could be achieved."
Federal Group executive general manager Daniel Hanna said the company would need to consider the impact the draft legislation would have on its operations.
The draft legislation will be put out for public consultation for five weeks.
It will be considered in Parliament at some stage this year.
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