James Packer’s Crown Melbourne has received a license extension until 2050 from the government of the state of Victoria, an approval that also will allow the Crown Resorts flagship to expand its table game and slot machine offering in return for payments of around A0 million.
Opposing politicians and anti-gambling activists have blasted the deal as lacking transparency. But Victoria’s treasurer, Michael O’Brien, said the agreement would support economic investment and jobs. “This agreement provides significant financial benefits,” he said, “as well as improved competitiveness and investment certainty for Crown and the 8,800 people who work there.”
Packer, chairman of parent Crown Resorts, was also quick to highlight the potential economic benefits, adding that his company has invested some $2 billion to upgrade the casino but was suffering “a major competitive disadvantage on the issue of taxation”.
The state also agreed that a planned “super-tax” will also be removed on all high-rolling VIP players from next year.
“Now,” Packer said, “with the support of the Victorian government, we will have a license that enables us to compete on a level playing field to help drive tourism, jobs and economic benefit for the state.”
Crown’s $900 million payment will include at least $35 million a year in taxes, starting in 2016, with a one-time $250 million lump sum once the licensing amendments come into force. Electronic gaming terminals at the property will rise from 200 to 250, with slots rising by 128 to 2,628.
The company will pay less tax than before on the casino’s VIP gambling trade.
The renewal comes on the heels of an investigative report by the newspaper Australian Age that Crown routinely flouts state gambling laws prohibiting the extension of credit to the country’s citizens
Under the Casino Control Act 1991, Australian residents must pay for chips in advance by cash, check, travelers’ check or a voucher. While offering credit in any form to locals is prohibited, it can be extended to international VIPs.
The report found that Crown has apparently been extending credit to Australian residents using a creative interpretation of the regulations governing how checks and chip vouchers are redeemed and the way residency is defined for high rollers.
A Crown spokesman said any suggestion Crown had breached the act was “wrong and baseless”, noting the Victorian Commission for Gambling and Liquor Regulation had given the company a clean bill of health following an extensive review last year.
