Crown pays millions to Victorian government as part of tax repayment

By Ethan Anderson Updated
Switkowski passes regulatory hurdles to become Crown chairman

Gambling giant Crown Resorts has told the stock market that it has paid a $61 million tax repayment to the Victorian Commission for Gambling and Liquor Regulation.

The Age reports that Crown made an announcement that it had “resolved to make a payment” to the VCGLR, representing an underpayment of casino tax by Crown Melbourne of about $37 million since 2012.

As well as the tax itself, Crown was required to pay penalty interest as part of the tax repayment.

Up to and including this week, that was about $24 million.

Crown said the tax component related to “the incorrect deduction of certain bonus rewards provided to patrons in connection with play on Crown Melbourne’s electronic gaming machines”.

The royal commission into Crown Resorts in Victoria has heard that by counting the cost of freebies doled out to punters such as food, drinks and hotel rooms as “winnings” from its poker machines, Crown short changed Victoria anywhere between $8 million and $272 million.

“Crown has notified the VCGLR of the outcome of this component of its ongoing review and has now paid the state approximately $61 million, being the amount calculated by Crown as the underpayment of casino tax and applicable penalty interest as referred to above,” Crown said in a statement.

Crown said it was continuing to review other aspects of casino tax repayment and would update the market once the review was complete.

Crown’s potential tax underpayment ranges from $8m to $272m

It said the Commission for Gambling and Liquor Regulation had advised that it would finalise “its consideration of Crown’s potential casino tax underpayments” after the Victorian royal commission into Crown delivered its final report.

The gambling giant’s announcement that it had paid $61 million came a week after the royal commission heard Crown is unfit to run a casino in Melbourne.

Counsel assisting the royal commission, Adrian Finanzio, SC, said last week that the James Packer-backed company put profits above legislative requirements and may need to repay close to $500 million in state taxes.

Involvement of Walsh and Coonan questioned at royal commission

Mr Finanzio said the involvement of Crown executive chairman and former Liberal senator Helen Coonan and Melbourne chief executive Xavier Walsh in the company’s recent history disqualified them from becoming “credible faces of change”.

Crown’s contribution to the state’s coffers, about one per cent of all tax revenue, has often been used to justify its existence and explain the sway it held over successive governments.

That made the revelation on June 7 that since 2012 it had rorted the government by making illegal deductions to its tax bill particularly explosive.

A 2012 internal Crown memo explaining the ploy said it probably “will not be noticed” by the Victorian gambling regulator.

It only came to the regulator’s and commission’s attention because Crown sent a spreadsheet estimating the underpayment to the inquiry by accident.

Two Crown directors, of the three who survived the Bergin inquiry into Crown in NSW, told the royal commission they doubted Mr Walsh was fit for the job after he failed to bring it to their attention.

The commission also heard there was conflicting evidence between Ms Coonan and Mr Walsh about what she did and how much she knew when he told her about the issue in February, a day after the royal commission was announced.

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