Australia’s casino and gaming giant, Crown Resorts pays back $61 million to the state as a fine towards underpaid taxes, including a penalty interest of about $24 million. The payment follows the Victoria’s Royal Commission probe in Crown's money laundering case with Crown Resorts admitting that they incorrectly deducted bonus rewards provided to pokies punters from FY 2012 till date. A bigger tax amount, as high as $272 mn, is expected to follow as the Royal Commission learns about the Crown's years of attempts at concealing deductions.
Nigel Morrison, Non-executive director at Crown Resorts, disclosed that he learned about the tax issues recently at a board meeting, along with other directors. However, according to the sources, Crown chair Helen Coonan knew about the tax evasion since February, months before directors were made aware of the case.
Morrison also raised alarm over the quality of the relationship between Crown and the Victorian Commission for Gambling and Liquor Regulation (VCGLR), given the fact that the company was able to make years of attempts at concealing the underpayments.
Crown claims to continue the review of other components of casino tax payments and to update the ASX once the review is completed. The company has been told that the Victorian regulator would conduct and conclude its own assessments of the underpayments after the Royal Commission submits the report of its findings due mid-October.
The Victorian investigation and a separate Royal Commission in Western Australia have been extended to ensure that all complicated aspects of the case are well-considered. The move follows the findings of the NSW probe from last year which disclosed many pieces of evidence revealing that Crown glossed over various forms of money laundering by high-roller Asian ‘junket’ tours at its Perth and Melbourne venues. As an outcome of this, Crown was denied a gaming license for its new $2.2bn Sydney casino.
The Perth probe notes that there was ‘uncertainty about the structure and operations of Crown group in the future’ as it investigates ousted former director John Poynton.
Serious action could be taken against Crown by the WA Gaming and Wagering Commission before the state’s final report gets submitted in March. Paul Evans, GWC lawyer, suggested that they will not necessarily await the review conclusions if matters disclosed gave rise to a need to take action immediately.
Counsel assisting Adrian Finanzio indicated that they were open to the commission stripping Crown of its Victorian license as the hearing came to its closing.
Poynton, who had been a nominee on Crown’s board for biggest shareholder James Packer and had reluctantly resigned in March due to a perceived lack of independence, was also heard in the commission proceedings. He was dethroned by Coonan and the NSW regulator after being ‘placed under significant pressure, both privately and in media statements’.
Peter Ward, the businessman’s lawyer, said, “The Bergin (last year’s NSW) inquiry made absolutely no adverse findings to his conduct as a director,”.
In his statement to the Royal Commission, Poynton expressed that he had hoped to rebuild Crown and make a prominent contribution, mentioning the recent takeover offers from Blackstone and Star Entertainment.
Mr. Poynton revealed that he couldn’t recall any information being shared with him by the management concerning junkets or any local investigation being done related to the case before mid-2019 when Crown’s money laundering scandal erupted in the media.
When NSW inquiry took hold of the matter in Aug 2020, Mr. Poynton confessed that he supported a suggestion made by a former Crown Board member, Guy Jalland, to suspend all junket relationships, considering which, Crown resolved to permanently cease dealing with junket operators by November 2020.
Poynton denied the existence of any red flags and said ‘No’ when asked if he should have done any unannounced inspections of the casino, including in the Pearl Room reserved for ‘VIP’ junket gamblers.
Image credits: The Guardian