Crown not sure if tax paid correctly in WA, follows multimillion-dollar Victorian underpayment

The beleaguered casino operator isn’t sure if it has paid the right amount of tax in WA, after massively underpaying in Victoria.

Crown says it is uncertain whether it has paid the right amount of casino tax in Western Australia, saying it’s a complex matter with areas even the state’s gambling regulator is not clear on.

Chief financial officer Alan McGregor fronted the Perth royal commission on Thursday, which is determining whether Crown is fit to hold a gaming licence.

The inquiry comes in the wake of Crown’s explosive money laundering scandal.

Mr McGregor said the company was trying to work out whether it had paid too much or too little tax for various categories.

These included tournament entry fees and prize pools that Crown had “seeded” or supplemented with its own cash.

The acting director general of WA’s Department of Local Government, Sport and Cultural Industries, Lanie Chopping, last month told the probe she was “not yet satisfied” Crown was not improperly deducting expenses for its Perth casino.

Mr McGregor said on Thursday one “system issue” – the treatment of amounts recorded in the IGT Advantage system – had been discovered and WA’s Gaming and Wagering Commission notified immediately.

But clarity was needed on deductions for third party prizes such as gift cards and cars, and poker and other tournament entry fees.

“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 prizes?” counsel assisting Michael Feutrill asked.

Mr McGregor replied: “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.”

Crown would speak with the GWC about those two unclear categories once it worked out its position, he said.

Mr McGregor said he had seen various correspondence recently from colleagues and WA’s Department of Racing, Gaming and Liquor on these matters “all not exactly on the same page”.

“So … that’s something I’m very, very keen to get to the bottom of and make sure that 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 in July paid back the state of Victoria $61m, including penalty interest of about $24m, after incorrectly deducting bonus rewards provided to pokies punters from the 2012 financial year to date.

More could be outstanding, with a full review yet to be completed.

Mr McGregor conceded the Victorian royal commission should have been told sooner about the underpayments, before it emerged in bombshell testimony in June.

“We wanted it (disclosure) to be seriously considered, put 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,” he said.

“But that didn’t happen until some times after the issue arose … did it?” Mr Feutrill asked.

Mr McGregor replied: “That’s right”.

Under questioning by his own lawyer Albert Dinelli, Mr McGregor recapped steps taken by Crown so far to redeem itself including closing overseas offices that sought to lure high-roller junket tours to its Australian venues, cutting ties with junket operators, and closing the two bank accounts at the centre of the scandal.

Other moves included not opening any new accounts other than under the licensee’s name.

The royal commission heard in August that Crown Perth had adopted the name “Riverbank Investments” for its account so Asian high rollers could mask the fact they were funnelling cash into a casino.

“We’ve ceased ambiguous descriptors, if you like,” Mr McGregor said.

There was “no doubt a way to go” with the reforms, Mr McGregor said.

Last year’s bruising NSW inquiry left Crown without a gaming licence for its new $2.2bn Sydney casino and the board was gutted, as recommended by the state’s gambling regulator, which recently indicated the company still had a long way to go to secure a gaming licence for the Barangaroo venue.

The findings of this year’s Victorian royal commission are due to be publicly released by the end of this month.

Conclusions from the separate WA probe won’t be handed down until March 5, with the final hearing slated for November 5.

Crown’s biggest shareholder and former chairman James Packer is scheduled to testify at the investigation in Perth next week.

The reclusive billionaire’s influence over the board was described in the NSW inquiry findings as “disastrous” as he was the driving force to secure more of the junket market.

Mr Packer’s Consolidated Press Holdings was no longer getting special treatment and was being treated “like any significant shareholder”, Mr McGregor said.

Originally published as Crown Resorts uncertain about casino tax paid in Western Australia, follows Victorian underpayment

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