The Victorian Gambling and Casino Control Commission (VGCCC) has slapped Crown Melbourne with another AU$20 million (US$13.6 million) worth of fines, this time for failing to pay the proper amounts of casino tax over an extended period of time.
The fine takes the total amount Crown has been fined by the Victorian regulator in the wake of the Finkelstein Royal Commission to AU$250 million (US$172 million) – on top of the AU$450 million (US$293 million) settlement it recently accepted from financial crimes watchdog AUSTRAC. The disciplinary action comes after Crown was deemed unsuitable to hold its Melbourne casino license for compliance failings, although it has been given a two-year window under an independent manager to return to suitability.
In announcing this latest fine, the VGCCC pointed to the Royal Commission’s finding that Crown had improperly claimed tax deductions by including the costs of certain promotional activities as amounts paid out as winnings. The Royal Commission also found that Crown deliberately concealed the nature of these deductions from the VGCCC’s predecessor, the Victorian Commission for Gambling and Liquor Regulation.
The true nature of the deductions was only revealed when the Royal Commission noticed a document setting out the quantum of unpaid casino tax among voluminous documents that Crown disclosed to the Royal Commission for other purposes.
Crown has since accepted it was wrong to claim these tax deductions and has paid approximately AU$61.5 million (US$42.3 million) to the State of Victoria comprising unpaid casino tax of about AU$37.4 million (US$25.7 million) and penalty interest of approximately AU$24.1 million (US$16.6 million). The AU$20 million fine is an additional action.
“Crown and other gaming licensees have important obligations to pay gaming taxes to the state,” said VGCCC Chairperson Fran Thorn. “Not only did Crown breach its obligations by claiming tax deductions to which it was not entitled, Crown also made significant efforts at concealment.
“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 AU$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.”
In a statement, Crown Melbourne CEO Mike Volkert said, “Crown Melbourne accepts the outcome from the VGCCC which was identified within the Victorian Royal Commission.
“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.
“Our Future Crown program is driving whole-of-company reform and we are focused on building a Crown that exceeds the expectations of our stakeholders and the community.
“This practice ceased in 2021 and Crown has since made the required payments to meet its casino tax obligations.”
Crown has previously been fined AU$30 million (US$20.6 million) for illegal bank cheque practices, AU$120 million (US$85.5 million) for responsible gambling failures and AU$80 million (US$55.0 million) for the illegal use of China UnionPay cards.
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