Liquor & Gaming Crown Casino

Allegations of tax evasion build case for more time to properly investigate Crown

07 June 2021


Victoria’s Royal Commission into Crown Casino has heard explosive evidence that Crown may have underpaid its gambling taxes by up to $168 million.

When pressed today, Crown representatives admitted they were concerned the Royal Commission might uncover an underpayment of taxes which they say allegedly occurred between the 2014 and 2019 financial years.

The Andrews Labor Government must explain how it failed to notice this alleged underpayment, which potentially dudded the state out of tens of millions of dollars it was entitled to.

These are serious allegations that must be properly investigated, but Labor’s decision to “fast-track” this Royal Commission means it likely won’t have the time – or resources – to deliver a full assessment.

Comment attributable to Shadow Minister for Gaming and Liquor Regulation Steph Ryan

“Victorians need to have confidence that the policing of operations at Crown Casino has been above board.”

“The state Labor Government is so close to Crown that it has failed to pick up on money laundering, organised crime and now potentially the underpayment of millions of dollars in tax.

“Daniel Andrews was so reluctant to call this Royal Commission that he could not even bring himself to announce its establishment.

“The revelations today that Crown may have underpaid its taxes by up to $168 million again highlights why the Royal Commission should be given an extension of time so that it can do its job properly.”

Background

Counsel Assisting: “Do you agree with me that when this practice first started, Crown was concerned about the likelihood of the regulator detecting what it was doing?

Mark Mackay: “Um…was concerned that the regulator…

Commissioner: “it didn’t want the regulator to find out that it was making these deductions, is another way of asking the question. Do you know whether Crown didn’t want the regulator to find out what was the character of the deductions it was making from gross to calculate the amount of tax it had to pay?”

Mark Mackay: “Yes. Understand the question and the answer is yes.”

….

Counsel Assisting: “By deducting these expenses, which are loyalty program expenses, it was cheaper for Crown to operate its loyalty program?”

Mark Mackay: “Yes”

….

Counsel Assisting: “Do you accept that this spreadsheet deals with an aspect of the gaming taxes paid by Crown from the 2014 financial year to the 2019 financial year?

Mackay: Yes I do.

Council Assisting: Do you accept this spreadsheet shows that in calculating the amount of gambling tax payable, Crown Melbourne deducted expenses associated with Crown’s loyalty program.

Mackay: Yes I do.

Counsel Assisting: “Do you accept the loyalty program expenses of those identified in cells F11, F12 and F13?”

Mackay: Yes.

Counsel Assisting: “And do you accept this spreadsheet shows the quote unquote tax impact of Crown deducting these loyalty program expenses when gamb…when calculating the gambling tax payable?

Mackay: Yes I do.

Counsel Assisting: And by tax impact you mean you know Crown saved by deducting those loyalty program expenses when calculating the gambling tax payable?

Mackay: Yes.

Counsel Assisting: “And you accept that if Crown was not entitled to those loyalty program expenses, then your spreadsheet shows Crown underpaid its gambling taxes in those years?”

Mackay: “Ah, could you repeat the question? Did you say we underpaid or…”

Counsel Assisting: “Do you accept that if Crown was not entitled to deduct those loyalty program expenses, then your spreadsheet shows Crown underpaid its gambling taxes in those years?”

Mackay: “I…if we weren’t allowed to deduct those, there would be additional tax payable and be they bottom number the 167, probably 8 million, yes.

Counsel Assisting: “So just to follow you up on that, your spreadsheet shows that in [inaudible] of the underpayment, assuming you weren’t allowed to deduct those amounts, was for those financial years $167,829,413?

Mackay: Yes, I do.

Counsel Assisting: And you accept that excludes F20 and F21?

Mackay: “Yes it does.”

Counsel Assisting: And you accept that excludes the super taxing?

Mackay: “Ah yes, yep.”

Counsel Assisting: “Now, who asked you to prepare or to look over this spreadsheet?”

Mackay: “Ah the best of my recollection I think it was Xavier Walsh”.

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