Crown Melbourne chief executive Xavier Walsh’s head may be on the chopping block after he failed to act on knowledge the casino may owe hundreds of millions in unpaid gaming taxes.
Crown Resorts non-executive director Jane Halton on Wednesday said she was “absolutely concerned” Mr Walsh knew for nearly three years the Southbank casino may have underpaid its gaming taxes and failed to act.
The inquiry into whether the James Packer-backed group can retain its Melbourne licence has heard Crown may owe the Victorian Government up to $272 million after claiming as losses promotions handed out through its pokies loyalty program since 2012.
Counsel assisting Penny Neskovcin QC said Ms Halton and Crown’s other directors had put their faith in Mr Walsh and had to assume he would do the right thing.
“Do you feel comfortable Crown Melbourne is in the right hands while Mr Walsh is CEO and director?” Ms Neskovcin asked Ms Halton.
The Crown Resorts director did not provide a direct response.
She said while Mr Walsh had been “very open, honest and straightforward”, there were a “range of issues” to manage at the company.
This included the fact Mr Walsh knew about the gaming tax issue since 2018 but only looked into it in February, two days after the royal commission was announced.
“I would say there are questions here, very definitely,” Ms Halton added. “I am concerned, that is absolutely correct.”
Ms Halton went on to say newly minted Crown Resorts chief executive Steve McCann, who faced the inquiry on Tuesday, would assess all the firm’s senior management going forward.
Ms Neskovcin further probed Mr Walsh’s suitability when she questioned another Crown non-executive director, Antonia Korsanos.
Ms Korsanos revealed she had a meeting with Mr Walsh on March 9 in which he raised “cultural” concerns, stemming from the 2012 document that had first alerted him Crown may have underpaid gaming tax.
But Ms Korsanos said he did not disclose the tax issue with her, claiming she first learned about it on June 7 – the same as Ms Halton.
Ms Neskovcin then asked Ms Korsanos whether she thought Mr Walsh was “trying to protect his own position”.
“I don’t know,” the non-executive director responded.
“If he knowingly didn’t tell me certain things, it’s worrying and it’s inappropriate.”
Meanwhile, Commissioner Ray Finkelstein QC raised concerns about Crown Resorts’ flagged move to centralise the running of its casinos in Melbourne, Sydney and Perth.
The former Federal Court judge said such a move would place Crown’s decision-makers outside the jurisdiction of the Victorian gaming regulator, a situation he described as “wholly unacceptable”.
“The regulator has very little supervisory authority to deal with Crown Resorts – in a practical sense, almost none,” Commissioner Finkelstein said.
“I don’t like it … I’m making it obvious.”
Victorian Premier Daniel Andrews on Tuesday said the prospect of Crown Melbourne losing its casino licence is “very real” and that anyone who can’t deliver on the highest standards is “out”.
The state opposition will seek crossbench support to open an inquiry into the Victorian Commission for Gambling and Liquor Regulation.
Shadow gaming minister Steph Ryan said the Crown Melbourne inquiry had been “nobbled” by a narrow terms of reference that did not include scrutiny of the regulator.
This followed former VCGLR regulators on Monday telling the ABC they were discouraged from reporting and examining alleged criminal activity inside Crown Melbourne.
The inquiry continues on Thursday with evidence expected from Crown Resorts executive chair Helen Coonan.