Crown Uncertain About Its WA Casino Tax Payments
Crown Resorts learns the fate of its Victoria Melbourne casino on October 26, but a potential new row emerged at the royal commission into its Perth property. Crown is unsure whether or not it paid the correct amount of casino tax in Western Australia.
Alan McGregor is the Chief Financial Officer for Crown Resorts. McGregor fronted the Perth royal commission. The royal commission’s Michael Feutrill quizzed McGregor about how Crown Perth calculated owed casino tax. McGregor admitted the gambling giant is figuring out the exact sums it owes the WA government.
“There are some doubts about the extent to which the correct amount of casino tax has been paid as a result of deductions for third party quizzes?” Feutrill asked.
“I’m not sure I’d call it doubts. What we’re working through, what we’ve learnt in recent times is to make sure that we’ve got the details correct and these tax matters are extremely complex, and not easy to work your way through the various legislation,” McGregor replied.
McGregor said correspondence between colleagues and WA Gaming and Wagering Commission is conflicting.
“That’s something I’m very, very keen to get to the bottom of and make sure both parties are crystal clear on how these things should be treated moving forward. And, by the way, remit any overpayments or underpayments that might arise.”
Crown Melbourne’s Casino Tax Underpayment
Crown admitted a massive underpayment of casino tax to the Victorian government. The royal commission heard the casino giant avoided $167 million in casino tax between 2012 and 2016. This happened because of the way the casino calculated what it owed.
Casino tax is owed on the amount of money wagered less money paid out in winnings. However, Crown deducted loyalty rewards, including free rooms and gifts from its take. The practice is not allowed under the terms of its licence.
Estimates of up to $200 million in underpaid casino tax were wide of the mark. Crown’s latest financial figures showed a $261 million loss. Crown has paid back $61 million to date, including a $24 million penalty interest.
The Perth royal commission wasted no time in discussing the casino tax underpayment with McGregor. It asked if he felt Crown should have come clean sooner.
“We wanted disclosure to be seriously considered, pit it that way, we had a clear intention to share it with the regulator so I think it’s fair to say we had an intention to share it with the commission as well.”
Shareholders Vote In Favour of New Directors
Crown’s latest Annual General Meeting shareholders vote unanimously for two new directors. Nigel Morrison received 99.73 per cent for votes for. Bruce Carter received 99.84 per cent of yes votes.
It was a similar positive vote for Dr. Ziggy Switkowski, Crown’s new Chairman. Some 99.83 per cent of votes voted in favour of Switkwoski’s appointment.
Things were less clear when regarding Crown’s remuneration report. Only 69.21 per cent voted in its favour. The 30.7 per cent who voted no are more than the 25 percent required for a veto. It is a case of back to the drawing board for Crown’s directors before they fill their pockets.
Almost 79 per cent voted yes for the potential retirement benefits of Steve McCann. McCann is the CEO of Crown Resorts.
Crown’s share price sent shareholders on a roller coaster over the past 12 months. Crown shares traded at $9.63 per share on December 31, 2020. They soared to $11.97 after takeover talk before climbing to $13.15 on May 17, 2021. Those shares were back to $8.78 by July 29, 2021. Crown shares cost $9.66 today, $0.03 more than at the start of the year.
Investors will panic sell if, on October 26, the Melbourne casino loses its licence, and more so if Perth’s casino tax underpayment is true.
