Crown hit with $20 million fine following Victoria tax failings

Crown Resorts has been fined $20 million in Victoria over historically claiming improper tax deductions for promotional costs that were disguised as amounts paid out as winnings.

The issue was uncovered in the 2021 Royal Commission into Crown Melbourne among voluminous documents that Crown disclosed for other purposes.

Last month,Crown and the financial crimes watchdog filed joint submissions with the Federal Court topropose the group pay one of the biggest financial penalties in Australian corporate history over its extensive anti-money laundering and counterterrorism failings exposed in the royal commission.

Crown has since accepted it had been wrong to claim these tax deductions and paid approximately $61.5 million to the state of Victoria,comprising unpaid casino tax of about $37.4 million and penalty interest of approximately $24.1 million. The Victorian Gambling and Casino Control Commission (VGCCC) fine is on top of these payments.

“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,” VGCCC chairperson Fran Thorn said.

The VGCCC said the fine would have been higher if not for the group’s “remorse and cooperation”. Crown Resorts was bought by Blackstone Capital for $8.9 billion in May last year.

Crown Melbourne chief Mike Volkert said the group accepted the outcome and the new ownership was committed to its cultural overhaul.

“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,” Volkert said.

Crown and the Australian Transaction Reports and Analysis Centre filed joint submissions with the Federal Court to propose a $450 million penalty over the group’s anti-money laundering and counter-terrorism failings atCrown Perth and Crown Melbourne in May.

The penalty,if approved,will be the third-biggest in the nation’s corporate history,and is about 5 per cent of Crown’s last listed market capitalisation.

In 2019,an investigation by this masthead and60 Minutes revealed Crown had been infiltrated byinternational criminal syndicates and money launderers. Since then,government inquiries in the three states where its casinos operate have ruled it unfit to hold a casino licence,preventing it from opening the high-rise casino at its newest $2.2 billion tower at Sydney’s Barangaroo in late 2020.

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