Crown directors show little faith in Melbourne casino CEO

By Mia Chapman Updated
Investor thinks Blackstone’s offer sells Crown short

Crown directors have expressed doubt about the suitability of its Melbourne casino boss after he downplayed evidence the group was dodging its tax obligations.

The Sydney Morning Herald reports that the new twist came as evidence emerged in state parliament that the number of gaming venue inspectors Victoria’s watchdog employs across the state has fallen almost 20 per cent in the past six years, from 69 to 56.

In a sign Victoria’s royal commission into Crown could trigger a new round of bloodletting at the beleaguered company, Jane Halton and Toni Korsanos told the inquiry on July 7 that they were concerned chief executive Xavier Walsh had failed to tell them about Crown’s tax issue at meetings in March.

The commission heard explosive evidence on June 7 that Crown had underpaid tax to Victoria since 2012 by making illegal deductions from its poker machine revenue and hid the practice from the state’s gambling regulator.

The regulator and commission only learnt about the practice after a Crown senior manager sent documents to the inquiry by mistake, estimating the tax it could owe, with estimates ranging from $8 million up to $272 million.

Ms Halton and Ms Korsanos, who are two of the three Crown directors to survive last year’s damning NSW Bergin Inquiry into the group, said they were in a Crown board meeting when they received a news article detailing the revelation.

“I, and everybody else that was there, was shocked,” Ms Halton told the commission. Without remembering her exact words at the time, “think of a three letter acronym,” she said.

Walsh assumed head chair in Melbourne just months ago

Mr Walsh, a senior executive at Crown Melbourne since 2013 who was put in charge of the Southbank casino in December 2020, had known since 2018 there had been a potential underpayment of tax and that Crown had hid it from the regulator.

Ms Halton said she was concerned Mr Walsh did not explain the issue at a meeting on March 4, especially given Crown’s board was trying to instil a new culture of “speaking up” about bad behaviour after its Sydney casino licence was suspended in 2020 following damning revelations in the Bergin Inquiry.

Counsel assisting the commission Penny Neskovcin asked whether Ms Halton felt comfortable that “Crown Melbourne was in the right hands while Mr Walsh is the CEO?”

“There are questions here, very definitely, but I have not had the opportunity to talk with him,” Ms Halton said, a former public servant who conducted a review of Australia’s hotel quarantine program for the Morrison government in 2020.

Ms Halton said Mr Walsh had been “quite candid” in subsequent meetings and she wanted to give Crown’s new group CEO Steven McCann a chance to make his own decision about the future of all of Crown directors.

“It’s not up to me now on my own, but… I am sceptical,” she said.

Ms Korsanos told the inquiry that if Mr Walsh did know about the issue earlier and had failed to raise it with her – as the evidence suggests – she would not feel comfortable with him remaining CEO.

“Was he confused? If he wasn’t, then it’s disappointing,” Ms Korsanos said.

“People can change but this needs to be discussed and understood.”

VCGLR inspector numbers slashed

Meanwhile, pressure continues to grow on the Victorian Commission for Gambling and Liquor Regulation, with evidence emerging that the number of gaming venue inspectors the watchdog employs has sharply fallen.

Responding to questions by the Public Accounts and Estimates committee, the VCGLR said it maintained a “consistent presence” at Crown casino during that time.

However, it was unable to confirm how many inspectors monitored the gaming giant without consulting historic rosters.

The opposition’s shadow gaming minister Steph Ryan said the data was proof the government had “gutted” the regulator.

“Both should be called to the royal commission to explain why inspector numbers were reduced while allegations of illegal and corrupt conduct were being aired,” Ms Ryan said.

Back to top