Crown Resorts fined $20 million for breaching casino tax obligations

June 19, 2023 4:55 am.by Peace Nwankpa

Crown Melbourne casino news
Australian casino giant Crown Resorts received a substantial fine of AUD$20 million from the Victorian Gambling and Casino Control Commission (VGCCC) for improperly claimed tax deductions.

Crown Resort’s tax failings were discovered by the VGCCC from the documents submitted by the 2021 Royal Commission probe. The company was found to have disguised promotional costs as winnings in a bid to claim tax deductions.

The Royal Commission also discovered that Crown Resorts had intentionally hidden the nature of the tax deductions from the Victorian Commission for Gambling and Liquor Regulation, VGCCC’s predecessor.

The VGCCC’s Chairperson, Fran Thorn, disclosed in a statement that Crown’s actions were unacceptable and a violation of its obligations. Thorn also said that she hopes the fine sends a strong message to other operators to discourage them from making similar moves.

“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,” Thorn said.

“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.”

The company’s flagship casino, Crown Melbourne, accepted its wrongdoing after the issue was brought to light by the Royal Commission. The company also received the fine and has paid around AUD61.5 million ($42.4 million) to the State of Victoria.

The amount included the unpaid casino tax, which came to approximately AUD$37.4 million, and a penalty interest of AUD$24.1 million. The VGCCC has also imposed an additional fine of AUD$20 million.

The commission revealed that the fine would have been much higher if Melbourne Storm official sponsor ‘Crown Resorts’ had not shown remorse and cooperation.

Crown Melbourne’s chief, Mike Volkert, reiterated the company’s renewed commitment to a cultural overhaul under new management. Volkert also stated that Crown was dedicated to creating new open and transparent relationships, regulatory reporting requirements, and improved internal controls.

Blackstone Capital bought the casino operator for AUD8.9 billion in May 2022.

According to the commission’s release, Crown Melbourne requested a grace period until June 2024 to pay the fines; however, it was granted until December 31, 2023, to pay the penalties.

This gives the company six months to pay the fine while ensuring the payment is made before the commission’s long-awaited decision on Crown Melbourne’s suitability to hold a license.

The VGCCC further revealed that the issue of time to pay would be discussed further to settle on the payment amount and frequency between now and December 31, 2023.

The recent move is the fourth time Crown has received disciplinary action from the VGCCC for conduct uncovered by the Royal Commission. In total, the regulator has issued financial penalties on Crown of around AUD$250 million.

Crown Resorts also received substantial financial penalties from Australian Transaction Reports and Analysis Centre (AUSTRAC) earlier this year for extensive counter-terrorism and money laundering failings at its Crown Melbourne and Crown Perth subsidiaries.

The fine was set at AUD$450 million and, if approved, will be one of the biggest in Australian corporate history.
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