Casino tax infringement in Victoria results in Crown penalties of AU$20 million

The results of the Royal Commission into the Casino Operator and Licence (RCCOL) in 2021, which recommended the fine, were published that year.

The RCCOL claims that Crown illegally deducted the costs of specific advertising activities from the sums paid out as wins. Crown Melbourne, a casino in Victoria, is run by the operator.

Between 2013 and 2021, the operator knowingly withheld information about these deductions from the state's regulator.

During this time, the Victorian Commission for Gambling and Liquor Regulation oversaw the industry. The Victorian Gambling and Casino Control Commission (VGCCC) subsequently took its place.

It was only after the RCCOL came across a document detailing the amount of unpaid casino tax that the VGCCC said the real nature of the deductions became apparent. This was one of several extensive documents that the Crown had previously revealed to the Royal Commission.

Crown said it was incorrect to claim the tax deductions after the Royal Commission exposed its actions. Crown has subsequently forked up around $61.5 million to the state, which includes $37.4 million in overdue casino taxes and $24.1 million in penalty interest.

But because the violation was so serious, the VGCCC decided to punish the operator an extra $20.0 million.

Extraordinary measures to keep
"The payment of gaming taxes to the state is an important responsibility for Crown and other gaming licensees," stated Fran Thorn, chairperson of the VGCCC. Crown failed in its duties by claiming unjustified tax deductions and went to great lengths to hide the fact that it had done so.

We will not abide such conduct at the VGCCC. It is our expectation that licensees will be forthright in all interactions with us and will pay any taxes owed. 

To make it obvious that Crown will face strong disciplinary action for this type of behaviour, we have today levied a substantial fine of $20.0 million on them. 

"The significance of paying gambling taxes and the necessity of honest and transparent dealings with the regulator are both conveyed by this fine, which should serve as a warning to other gambling operators."

Crown Melbourne CEO Mike Volkert responded by stating his acceptance of the VGCCC's ruling and the Royal Commission's conclusions.

"Under new ownership and leadership, we are committed to improving internal controls and our regulatory reporting requirements. We also intend to have an open, constructive, and transparent relationship with our regulators and stakeholders. These historical breaches, decisions, and actions have no place at Crown," Volkert stated.

Building a Crown that goes above and beyond what stakeholders and the community expect is our top priority, and our Future Crown program is propelling company-wide reform in that direction.

The practice was discontinued in 2021, and Crown has subsequently paid its casino taxes in full.

Corrective measures
The VGCCC has disciplined Crown for actions revealed by the Royal Commission four times before, each time using stronger enforcement powers. Crown has been fined $250.0 million by the VGCCC since obtaining these powers.

Due to a slew of violations in the Australian state, the VGCCC levied two fines last year, reaching an unprecedented $120 million. Crown, according to the VGCCC, had neglected its responsibility to intervene and prevent gambling harm for many years, thereby failing its responsibility to promote responsible gaming.

Crown was fined $80 million by the VGCCC last year for its China Union Pay procedure. According to the VGCCC's inquiry, Crown Melbourne unlawfully let customers to use CUP credit or debit cards to access gambling funds from 2012 to 2016.

The Australian government's counter-organized crime financial agency requested a $450 million fine against Crown's Melbourne and Perth casinos last month for the company's violations of AML standards.

The process that started more than a year ago has now come to a close with Crown's acquiescence to the enforcement action. The company has been under constant regulatory scrutiny due to its historical AML breaches.