Crown Resorts’ old empire strikes back over unpaid taxes

Crown Chairman Helen Coonan fronts the Victorian Royal Commission into the Casino Operator and Licence in Melbourne. Source: Supplied

As Crown Resorts executive chair Helen Coonan fights to save the groups’ three-city casino empire, she is desperate to distinguish the company into two parts: ‘old Crown’ and ‘new Crown’.

It is a key pillar of her reformation agenda to prove to regulators in NSW, Victoria and Western Australia that Crown is a “suitable” casino licence holder.

But while Crown may have a new chief executive, new directors and a raft of new policies, this week the James Packer-backed group displayed, like a faithful old dog, how hard it is to shake off old tricks.

On Tuesday evening - after TV news bulletins and as most papers were heading to print - the company released a statement saying it had “resolved” to pay back $37m in unpaid gambling taxes to the Victorian government, despite one of its own executives estimating the bill topped $200m. That’s less than 20 per cent of what the State of Victoria - which has overseen Crown’s operations since 1994 - is owed.

It’s hardly an act that is likely to cajole Victorian Premier Dan Andrews, who was left red-faced by the revelations of last year’s NSW Bergin Inquiry. After all, It took another state - NSW - to unearth that Crown had facilitated money laundering and other organised crime at its Melbourne casino on Andrews’s watch.

While Andrews announced a speedy Royal Commission, declaring he was not afraid to “rip up” Crown’s casino licence, Crown must have taken comfort it was sitting in a house of brick with a loud wolf outside bellowing: “I’ll huff and I’ll puff…” and you know the rest of the story.

Why else - even after counsel assisting the Victorian Royal Commission said Crown wasn’t suitable to hold a casino licence - would the company feel it was ok to pay back a fraction of the taxes it owes to the state of Victoria?

Crown said it would pay the government a further $24m in “penalty interest”, taking its total repayment to $61m. But that is less than a third of the amount the commission heard it potentially owed.

Crown Melbourne gaming machines executive Mark Mackay told the commission that between 2014 and 2019 Crown may have underpaid gaming tax by at least $167.8m, and that “it could be over two hundred” when encompassing financial year 2020 and financial year 2021.

Not paying that in full could almost be perceived as Crown continuing to wave a proverbial finger at Victorian regulators and authorities. It is Victoria’s biggest single site employer and its Palladium the host to premier events including the AFL’s Brownlow Medal Count, the Logies and Allan Border Medal. For too long the company has swaggered with ‘too big to fail’ hubris.

It is this perception that Coonan has been desperate to shake off.

But it is understood that in Crown’s camp, the thinking is not to write a blank cheque or pay $200m until it completes an internal review and obtained legal advice. And the Victorian government will have the final say on whether $61m is another to cover the company’s tax underpayments.

Indeed Coonan wants Crown to be seen as working cooperatively with the regulators - not acting as a defensive antagonist.

But she has been hamstrung. During her evidence before the Victorian Royal Commission earlier this month she said she urged the company to adopt a less defensive tone during the NSW Bergin inquiry last year and when dealing with the media but Crown’s lawyers and her former fellow directors overruled her.

“You still have to have numbers on a board even if you‘re the chair,” she told the commission.

Coonan said her past attempts at reform had also been blocked by directors loyal to Mr Packer, including a move to oust former CEO Ken Barton as the Bergin inquiry drew to a close.

“The board did not support me in that. Ms (Jane) Halton did, and Mr (John) Horvath, but no one else.”

So what’s the excuse now? Coonan has the numbers to create the ‘new Crown’.

And despite all the testimony and legal arguments during the Victorian Royal Commission - not to mention Patricia Bergin’s 751-page report into Crown - achieving that goal should be relatively simple. It comes down to obeying the law and doing the right thing.

That might be a Pollyanna or too utopian way of thinking but it is ultimately what Crown’s suitably to holding a casino licence - not just in Victoria but in NSW and Western Australia - boils down to.

Australians want companies to do the right thing and follow the law. And companies, particularly over the past decade, have been eager to show off their environmental, social and governance (ESG) strategies to highlight how they do that.

For Crown, paying its taxes - in full - would be a good place to start showing that it has well and truly shaken off the ‘old Crown’ and Coonan has heralded the start of a new era of Crown being a responsible corporate citizen.

As Bergin said there is a big difference in accepting significant cultural and governance problems exposed during a public inquiry and having the “open-mindedness to detect the problems for oneself and remedy them”.