The story revolving around Crown Resorts just keeps going deeper. The gaming and entertainment group has not paid almost $200 million to the Victorian government in pokies tax for the last seven years. Namely, Crown has been classifying marketing costs as winnings paid from pokie machines when adding the numbers on its gambling bills. For example, one of the said costs has been free parking.
The latest findings show Crown Resorts has been deducting the cost of meals, free accommodation, and loyalty scheme points from funds taken through 2,628 pokies machines since 2014 in its Melbourne casino.
Mark Mackay, Crown’s executive general manager of gaming machines, said that Xavier Walsh, who acts as the Crown Melbourne CEO, told him, in February 2021, to calculate how much the company saved from 2014 to 2019. Although the total came to $167 million, it would be closer to $200 with the inclusion of the last two years.
Mr Walsh noted the company believed that the deductions were entitled, but they performed this particular activity due to concerns about the state’s tax legislation ambiguity.
Geoffrey Kozminsky, one of the councils assisting the inquiry, said that Crown Melbourne should pay Victoria’s gambling tax based on total gambling revenue. That means the company should calculate the gross amount of funds received through gambling, not including the paid-out winnings.
Mr Mackay agreed with Mr Kozminsky that Crown was not entitled, at least from February this year, to deduct the expenses noted in the spreadsheet. Yet, Crown adopted the practice to benefit its bottom line.
Furthermore, Mr Mackay agreed that Crown did not want Victoria’s regulator to find out about the nature of the company’s deductions. Some of Crown’s expenses like loyalty programs and parking were referred to as jackpot expenses in the company’s internal tax documents.
Upon being asked whether these expenses masked something, Mr Mackay answered that that’s what they’ve always been called.
Crown’s CEO ordered Mr Mackay to produce these spreadsheets four days after Victoria’s government ordered the royal commission inquiry into Crown’s license to make matters even more suspicious.
More specifically, on February 26, the commission ordered Crown Melbourne’s directors (including Mr Walsh) to produce documents and information about breaches of its government’s agreements. However, Crown did not hand over the spreadsheet on the potential tax underpayments.
Mr Mackay could not find an excuse for such behaviour upon being asked about it.
Melissa Horne, a spokeswoman for Victoria’s gaming minister, said it would be inappropriate to comment on the current events while the investigation is still ongoing. Steph Ryan, the opposition’s gambling spokeswoman, said that the parties in charge should prolong the investigation after August 1 to perform their job properly.
Lastly, Crown received legal advice that Crown Melbourne did not follow through with Victoria’s Casino Control Act. It took $160 million in credit and debit card payments from international guests for casino chips — an illegal act in the state.
Commission public hearings regarding this case continue on Tuesday.