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Crown Melbourne deducted AU$200 million in casino comps as player winnings to reduce tax

Ben Blaschke by Ben Blaschke
Tue 8 Jun 2021 at 05:10
Wynn terminates negotiations to take over Australia’s Crown Resorts

Crown Melbourne

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A Royal Commission into Crown Melbourne’s suitability to retain its long-held casino license in Victoria was told Monday that Crown Resorts had avoided paying up to AU$200 million in taxes by classifying comps, including free parking, as gambling winnings.

Under Victoria’s Casino Control Act, Crown Melbourne is required to pay tax as a percentage of its gross gambling revenue (GGR) – calculated as gambling revenue minus winnings.

However, the Royal Commission was told by Crown Melbourne’s Executive General Manager of Gaming Machines, Mark Mackay, on Monday that the company had also included comps in its list of deductions, comprising everything from free parking to free hotel rooms, meals and loyalty rewards points given to members and special guests.

The exact amount of savings was calculated by Crown earlier this year at the request of Crown Melbourne CEO Xavier Walsh following a directive from the Royal Commission to provide any information that may constitute a breach of its Casino Control Act. However, after calculating tax savings of AU$167 million between 2014 and 2019 – and up to AU$200 million through to 2021 – Crown subsequently failed to pass the details on.

McKay told the Royal Commission on Monday that there was ambiguity in the definition of winnings contained within the Casino Control Act but agreed comps, which had been listed in company documents as “jackpot” expenses, “are not from a gaming machine event.”

The revelations on Crown’s alleged tax avoidance came just hours after the company had revealed via an ASX filing on Monday morning that it had received legal advice on likely breaches of the Casino Control Act at Crown Melbourne between 2012 and 2016 that had seen it process more than AU$160 million in gambling funds via credit or debit card processing.

According to Crown, the historical breaches involved the company receiving payment from debit or credit cards of international guests at Crown Melbourne’s Crown Towers Hotel, with the funds then made available to the patron for gaming at Crown Melbourne’s casino.

Under Section 68 of Victoria’s Casino Control Act, an operator is prohibited from providing money or chips for gambling as part of a transaction involving a credit or a debit card.

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Tags: AustraliaCrown MelbourneCrown Resortsgross gaming revenueroyal commissiontax
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Ben Blaschke

Ben Blaschke

A former sports journalist in Sydney, Australia, Ben has been Managing Editor of Inside Asian Gaming since early 2016. He played a leading role in developing and launching IAG Breakfast Briefing in April 2017 and oversees as well as being a key contributor to all of IAG’s editorial pursuits.

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