The Australian Tax Office (ATO) is currently seeking to claim over AU$270 million from Crown Resorts in tax levies following the casino group’s attempts to enter the Las Vegas casino scene between 2007 and 2014.
Although neither party has made any recent comments about the dispute, Crown Resorts previously claimed that the group had paid the correct amount of tax on these ventures, even though none proved to be successful. The spokespersons for the casino group went on further to state that the tax amount is larger than Crown Resorts posted profits for the last financial year.
The dispute is set to be heard in court on 31 August by a Melbourne court.
Crown Resorts Failed US Expansion Attempts Lead to Tax Woes
Crown Resorts aimed to purchase Cannery Casinos in 2007 for over AU$1.75 billion in the hope that the purchase would spearhead the group’s entry into the US casino market. However, the 2008 Great Recession and the resulting poor projected profits led to Crown lessening the terms of the deal. As opposed to being granted full ownership of the Cannery Casino group, Crown only purchased a 24.5% stake and was forced to pay AU$50 million in compensation for the change.
The group later tried to enter the US market, along with the Chinese market in 2014. The expansion plan saw Crown purchase property in both areas with the aim of building billion-dollar integrated resorts. However, the plan came to an abrupt end after staff at the group’s Asian resort were arrested due to changes in Chinese gambling regulations.
The area’s changes in gambling regulations led to the group losing footing in a highly profitable market and increased fear of foreign investment. The results of this situation ultimately led to the sale of Crown Resorts remaining US investments to Wynn Resorts last year.
A Bad Year for Crown Resorts
It wouldn’t be unfair to say that 2018 hasn’t exactly been the best year for Crown Resorts. The year has seen group founder, James Packer, step down from the board amid a number of controversies along with a number of pokie tampering investigations be lodged against Crown Melbourne. Whether or not the group will actually need to pay the massive tax levy, remains to be seen.