Crown Resorts Refuses to Pay $270 Million Tax Bill Levied on Aborted Las Vegas Investments
Posted on: July 28, 2018, 02:00h.
Last updated on: July 27, 2018, 06:43h.
Crown Resorts will take on the Australian Tax Office in court next month in a bid to wipe a disputed nine-figure tax bill.
Crown’s $270 million tax headache is related to its two aborted attempts to expand into the Las Vegas casino market.
In 2007, Crown agreed to acquire Las Vegas-based Cannery Casinos for $1.75 billion, but balked when the global economic downturn kicked in. Instead, it renegotiated a 24.5 percent stake and agreed to pay a $50 million fee to terminate the original deal.
The James Packer-controlled company’s second attempt to break America came in 2014, when it acquired the site on the Las Vegas Strip on which the New Frontier once stood. The plan was to build the Alon Las Vegas, a $1.6 billion to $1.9 billion integrated resort.
But in late 2016, Crown was forced to rein in its international expansion, in East Asia as well as the US, after a Chinese gambling crackdown resulted in the imprisonment of over a dozen of its staff.
High Roller Drought
A hugely lucrative revenue stream – the Chinese VIP segment – dried up overnight, which increased the risks associated with highly-leveraged foreign investment, and Crown chose to concentrate instead on projects closer to home. It sold Alon Las Vegas to Wynn Resorts for $300 million in 2017.
The tax dispute relates to taxes levied on these transactions by the Australian government, which Crown claims were tax deductible.
The company said in its annual report last August that it believes it has paid the correct amount of tax and would be prepared to say so in court, if necessary.
Court documents filed at the beginning of this month show the tax office dismissed Crown’s appeal in May.
Packer Packs It In
It’s been a turbulent few years for Crown and its founder James Packer, who resigned from the board in March, citing “mental health issues,” not thought to be related to his nine-figure tax bill – but it can hardly be helping.
Packer, who is Australia’s fourth richest man, was dealing with the fallout of the China arrests as his much publicized engagement to singer Mariah Carey was breaking down. Their relationship and subsequent split resulted in a barrage of unwanted tabloid attention.
Meanwhile, he was dragged into a corruption investigation in Israel, after it emerged he had showered the country’s Prime Minister Benyamin Netanyahu and his family with gifts, innocently, he said.
This year, Crown’s flagship casino, Crown Melbourne, was investigated by regulators over allegations of illegal slots tampering. It was ultimately hit with a record fine.
Related News Articles
Similar Guides On This Topic
Related News Articles
September 30, 2021 — 7 Comments—
October 7, 2021 — 7 Comments—
October 4, 2021 — 6 Comments—