Australian land-based casino operator Crown Resorts has been fined A$20 million (£10.8 million/€12.6 million/US$13.8 million) for breaching Victorian tax rules.
The fines were imposed in response to findings released by the Royal Commission on Licensing of Casino Operators (RCCOL) in 2021.
According to RCCOL, Crown falsely claimed tax deductions by including the cost of certain promotional activities in the prize money. The operator operates Crown He Melbourne Casino in Victoria.
It was also found that the operator deliberately concealed the nature of these deductions from state regulators during the 2013-2021 focus period.
For part of this period, the Victorian Gambling and Alcohol Regulatory Commission acted as the regulator. It has since been replaced by the Victorian Gambling and Casino Control Commission (VGCCC).
The VGCCC said the true nature of the deduction only became apparent when RCCOL became aware of the documents listing the amount of unpaid casino tax. This was one of a large number of documents that the Crown disclosed to the Royal Commission for other purposes.
After the conduct was brought to light by the Royal Commission, Crown admitted that it had made a mistake in claiming the tax credit. Crown has since paid the state about $61.5 million, including $37.4 million in unpaid casino taxes and $24.1 million in fine interest.
However, due to the nature of the violation, the VGCCC also chose to impose an additional fine of $20 million on the operator.
great effort to cover up
“Crown and other gaming licensees have a significant obligation to pay gaming taxes to the state,” said VGCCC Chairman Fran Thorne. “Not only did Crown violate its obligations by claiming unentitled tax deductions, but it also went to great lengths to cover it up.
“VGCCC will not tolerate this practice. We expect our licensees to comply with their tax obligations and be transparent in their dealings with us.
“Today, we fined Crown a hefty $20 million to send a clear message that this type of behavior will result in strong disciplinary action.
“The 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 regulators.”
In response, Crown Melbourne CEO Mike Volkert said he accepted the decisions and findings of both the VGCCC and the Royal Commission.
“These historic violations, decisions and actions have no place at Crown and under new ownership and leadership, we will continue to engage openly, constructively and transparently with regulators and stakeholders. We are committed to building and improving our internal controls and regulatory reporting requirements,” Volkert said.
“Our Future Crown program drives company-wide transformation and we are focused on building Crown to exceed the expectations of our stakeholders and community.
“This practice will be phased out in 2021, and Crown has since made the necessary payments to meet its casino tax obligations.”
disciplinary action
This is the fourth time the VGCCC has exercised stronger enforcement powers to take disciplinary action against the Crown for conduct uncovered by the Royal Commission. Since obtaining these powers, the VGCCC has fined Crown a total of $250 million.
Last year, the VGCCC imposed a record two fines totaling $120 million for a series of failures in Australian states. The VGCCC alleges that Crown failed to intervene to prevent gambling harm and neglected its responsible gambling obligations over the years.
Last year, the VGCCC also fined Crown $80 million over China UnionPay transactions. A VGCCC investigation found that Crown Melbourne illegally allowed patrons to use their CUP credit or debit cards to access gambling funds between 2012 and 2016.
Crown-owned casinos in Melbourne and Perth last month agreed to a proposed $450 million fine with Australia’s organized crime bank for violating the Anti-Money Laundering Act (AML).
of the crown The agreement to the enforcement action marks the end of a process that began more than a year ago, as the company faces ongoing regulatory scrutiny over its historic AML failures.
