Commissioner’s blast: Crown misconduct ‘wherever I look’

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Mr Walsh, a senior executive at Crown Melbourne since 2013, said he felt “desperately” for frontline staff who had not been properly led. “I share responsibility for that. But … as an organisation [you] have to start somewhere, and I believe we’ve made that start.”

Earlier on Monday the commission heard that Crown decided not to tell Victoria’s gambling regulator it may have been cheating on its taxes by deducting marketing expenses – such as free food and drinks for players – from its poker machine revenue because it did not think the watchdog would notice.

The possible underpayment – which has been estimated at as little as $8 million and up to $272 million – only came to the attention of the Victorian regulator and the royal commission because details were sent to the inquiry by accident, counsel assisting Adrian Finanzio, SC, said on Monday.

Mr Walsh said he first became aware of the practice in 2018 when he read a 2012 memo explaining that it probably “will not be noticed” by the Victorian Commission for Gaming and Liquor Regulation (VCGLR) given other changes to Crown’s tax rates at the time.

Commissioner Finkelstein asked Mr Walsh why “this kind of deception didn’t worry you enough in 2018 to do anything about it?”

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Mr Walsh said he took “too much comfort” in the fact that the regulator looked at the deductions in 2018 and “didn’t ask any further questions”. However he later conceded the issue did not get a “full airing” by the regulator, which only learnt Crown had probably been dodging Victorian tax since 2012 when it was raised at a commission hearing on June 7.

The commission ordered Crown to provide a full list of potential legal and regulatory breaches but the possible tax underpayment was not included in the first two tranches of documents sent in response.

Mr Finanzio asked Mr Walsh how anyone would have learnt about the possible rort if Crown’s pokies boss, Mark Mackay, had not accidentally sent the commission his calculations of the size of the possible underpayment among documents to responsible gambling.

Mr Walsh said the company was extremely busy preparing for the commission and would have hopped it was disclosed eventually.

He said he first raised the tax issue with Crown’s executive chair Helen Coonan on February 23 this year, the day after Victoria’s royal commission was announced in February.

However he said the trigger for the disclosure was Ms Coonan’s recent elevation to the top role at Crown and her call for executives to “bring out your dead” as part of a cultural overhaul, not the inquiry.

Mr Walsh did not meet with external lawyers to discuss the issue for almost a month after that, on March 18, and did not raise it with the VCGLR in the interim.

The royal commission is set to conclude its public hearings this week, with senior figures including executive chair Helen Coonan to give evidence.