In its 2022-23 budget, the government of Victoria, Australia has set aside AU$55.6 million (US$39.3 million) to strengthen oversight of the state gaming industry.
The government said the funds will be used to support the work of Special Manager Stephen O’Bryan, who will oversee all aspects of the casino’s operations to ensure Crown Resorts fully complies with gaming regulations. A report from Royal Commissioner Ray Finkelstein, published last October, found Crown unsuitable to retain its Melbourne gaming license but gave it two years to return to suitability.
According to Inside Asian Gaming, the budget will also fund a new regulatory body, the Victorian Gambling and Casino Control Commission (VGCCC), which has replaced the Victorian Commission for Gambling and Liquor Regulation.
Victoria will adjust the tax rate on Crown’s electronic gaming machines (EGMs), a change that could generate up to AU$30 million in new revenues a year, and tax Crown at the same rate as EGMs operated by not-for-profit, community-based venues such as the Returned and Services League, a veterans’ organization.
“We’re getting on with delivering the reforms and investments needed to strengthen oversight of Crown and the whole Victorian gambling industry, with a focus on harm minimization,” said Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne.
Treasurer Tim Pallas added, “This is a fair and reasonable change that means Crown is paying the same tax rate on its pokies as smaller, community-based venues throughout Victoria. For too long, Crown has benefited from preferential tax treatment.”
The Australian Transaction Reports and Analysis Centre, a financial watchdog known as AUSTRAC, has filed civil proceedings against Crown Melbourne and Crown Perth, alleging they breached their regulatory obligations under the country’s Anti-Money Laundering and Counter-Terrorism Financing Act.
As reported by Asia Gaming Brief, the proposed EGM tax could cost Crown between 3 percent to 5 percent of EBITDA from 2024 on.
Crown is in the process of being acquired by U.S.-based private equity group Blackstone for $8.9 billion. J.P. Morgan analysts say they don’t expect the tax changes to affect the purchase, but are lowering their share price target by 4 percent to $13.10 and cutting the recommendation to neutral to reflect more recent trading.
