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Sunday, July 25, 2021

Crown Vic CEO knew about tax underpayment

Crown Melbourne’s chief knew the company may have underpaid more than $200 million in gaming tax for years but only began looking into it after a royal commission was announced. 

Giving evidence on Monday before the inquiry into whether Crown retains a licence for its Melbourne operations, the Southbank casino’s chief Xavier Walsh said he knew about the tax issue since mid-2018.

Mr Walsh said at this point he learned Crown wasn’t going to flag with the Victorian gaming regulator that it may have been underpaying tax, by claiming promotions it handed out to punters through its pokies loyalty program as losses. 

The practice had existed since at least 2012, with documents from that year saying it wouldn’t be “noticed” by the Victorian Commission for Gambling and Liquor Regulation. 

Mr Walsh said this “raised questions” with him when he read them in 2018. 

But he didn’t ask anyone to look into how much the James Packer-backed group ma y owe the Victorian government in unpaid tax until February 24 this year – two days after the inquiry was announced.

Commissioner Raymond Finkelstein QC asked Mr Walsh why he did nothing for nearly three years. 

“It couldn’t have bothered you that much – because you did nothing,” Commissioner Finkelstein said to Mr Walsh.

“I’m trying to come to grips with why you did nothing since 2018. I need an answer to the question.”

Mr Walsh said he “took comfort” knowing that senior management at Crown Melbourne knew about the issue. 

But Commissioner Finkelstein, a former Federal Court judge, was not convinced. 

“This deception was known to many people in the organisation and it didn’t seem to trouble anyone,” he said.  

Mr Walsh said he asked Crown’s executive general manager of gaming machines, Mark Mackay, to calculate the firm’s potential tax underpayments on February 24. 

This, he said, had followed a “strident” push in late 2020 by Crown’s ex ecutive chairman, Helen Coonan, to change the firm’s culture.

But counsel assisting Adrian Finanzio SC put to Mr Walsh that the royal commission, announced by the Daniel Andrews Labor government on February 22, was the real catalyst. 

“You were concerned that that issue, the underpayment of gaming tax, would come to light in the royal commission?” Mr Finanzio asked Mr Walsh.

“It was that which prompted you – rather than Helen Coonan’s ‘broad invitation’ to change the culture.”

Mr Walsh said he had a “residual discomfort” with gaming tax issue, but conceded he didn’t act until two days after the inquiry was announced. 

He added that Ms Coonan asked him, in a February 23 meeting, to “bring out your dead”, referring to the 1975 movie Monty Python And The Holy Grail.

The royal commission was set up after a NSW inquiry found Crown unsuitable to operate its newly built casino in Sydney’s Barangaroo.

It continues on Monday with further evidence from Mr Walsh. 


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