The Royal Commission into the Casino Operator and Licence found that Crown improperly claimed tax deductions by including the costs of certain promotional activities as amounts paid out as winnings. The Royal Commission also found that Crown deliberately concealed the nature of these deductions from the VGCCC’s predecessor, the Victorian Commission for Gambling and Liquor Regulation.
The true nature of these deductions was only revealed when the Royal Commission noticed a document setting out the quantum of unpaid casino tax among voluminous documents that Crown disclosed to the Royal Commission for other purposes.
Once its conduct was brought to light by the Royal Commission, Crown accepted it had been wrong to claim these tax deductions and has since paid approximately $61.5m to the State of Victoria comprising unpaid casino tax of about $37.4m and penalty interest of approximately $24.1m.
On top of this, the VGCCC has today imposed a fine of $20m.
Chairperson Fran Thorn said: “Crown and other gaming licensees have important obligations to pay gaming taxes to the State. Not only did Crown breach its obligations by claiming tax deductions to which it was not entitled, Crown also made significant efforts at concealment.
“The VGCCC will not tolerate this behaviour. We expect licensees to comply with their tax obligations and to be transparent in their dealings with us. We have today imposed a significant fine of $20 million on Crown to send a clear message that this type of conduct will be met with strong disciplinary action. This fine also sends an important message to other gambling operators about the importance of complying with their obligations to pay gambling taxes and the need for frank and open dealings with the regulator.”
This is the fourth time the VGCCC has used its stronger enforcement powers to take disciplinary action against Crown for conduct uncovered by the Royal Commission. Since receiving these powers, the VGCCC has imposed fines on Crown totalling $250m.
Crown Melbourne CEO Mike Volkert said: “Crown Melbourne accepts the outcome from the Victorian Gambling and Casino Control Commission which was identified within the Victorian Royal Commission. These historical breaches, decisions and actions have no place at Crown, and under new ownership and leadership, we are committed to an open, constructive, and transparent relationship with our regulators and stakeholders, as well as improving internal controls and our regulatory reporting requirements.
“Our Future Crown program is driving whole-of-company reform and we are focused on building a Crown that exceeds the expectations of our stakeholders and the community,” he added. “This practice ceased in 2021 and Crown has since made the required payments to meet its casino tax obligations.”