Shares in the $1.6 billion gaming group leapt 25 per cent shortly after Labor announced it would not bring its casino poker machine duties into line with Victoria until 2030.
Under the deal affecting The Star Sydney casino, the tax on pokies will rise slightly next year and again in 2027, and a 35 per cent cut of any gaming revenue above $1.125 billion per year will land in state coffers.
In return for the reprieve, the gaming venue has agreed to guarantee 3000 jobs for the seven-year period.
It will also start a cashless gaming trial on eight popular table games and 50 poker machines by October 31.
The changes are expected to generate an extra $54 million in its first three years and an extra $529 million over the decade.
The previous Perrottet coalition government planned to institute Victoria's scheme by July 1, levying duties of up to 60.9 per cent.
It also booked a $365 million windfall over three years.
But NSW Treasurer Daniel Mookhey dismissed the "fantasy figures", saying internal casino data and independent assessment showed the policy would have shuttered the Sydney casino.
"You can't collect tax from a dead business," he told reporters on Friday.
Star was the only business copping a tax hike in the upcoming NSW budget, Mr Mookhey said.
"We have carefully designed this arrangement to collect every dollar of available tax that Star can afford to pay."
The ASX-listed company has shed more than $3 billion in market value in the past two years after scathing government probes, more than $350 million in fines and allegations of fraud, money laundering and links to organised crime.
In April, it said it would sack hundreds of employees and freeze salaries after raising $800 million at a deep discount to boost its balance sheet.
But Friday's news rocketed Star's shares to a one-month high of $1.22 after closing at 97.5 cents on Thursday.
Star said the change from the "flawed" coalition regime to a seven-year transition allowed it to continue working at pace to "restore The Star Sydney to suitability, earn back the trust of the community, and ensure we remain a valuable contributor to the NSW economy."
Delaying the higher levy would protect jobs by creating much-needed certainty, the United Workers Union said.
"Jobs at The Star Sydney are good, stable, union jobs which have a level of security, dignity and fair wage rates and conditions not seen in the wider hospitality industry," UWU deputy director Imogen Beynon said in a statement.
But Liberal MP Natalie Ward accused Labor of "misaligned priorities" by helping Big Gaming as many businesses faced closure and families copped rising bills.
"I don't know any business in NSW that has the luxury of the premier saying 'Just pay the tax that you think you can afford'," she told reporters.
The NSW Greens said a $7 billion budget blackhole meant NSW couldn't afford to "go soft" on casinos that had subsisted on proceeds from money laundering, organised crime, and large-scale fraud for years.
"It's not the responsibility of NSW residents to subsidise the profits of the NSW gambling industry which reels in billions in profits every year," Greens gaming spokeswoman Cate Faehrmann said.
Negotiations with NSW's other casino operator, Crown, are ongoing.
While Crown cannot operate pokies in its $2 billion casino on Barangaroo Point until 2041, the government has threatened to legislate if the operator does not agree to the same table gaming rates levied on Star.
