Australian casino staff detained in Chinese gambling probe

Crown casino in Melbourne

A senior executive of Australia’s largest casino operator and two other Australians have been detained in an investigation of suspected gambling crimes, the Chinese government said yesterday, in an apparent crackdown on overseas tours for high rollers.
The head of Crown Resorts Ltd.’s VIP International team, Jason O’Connor, is believed to be one of 18 Crown employees being questioned by Chinese authorities, the company said in a statement to the Australian Securities Exchange.
The Chinese foreign ministry said in a regular briefing that Australians have been detained in Shanghai for suspected involvement in gambling crimes, but did not provide further details.
Fairfax Media reported over the weekend that police took the three Australians, who were visiting China on business, and local Chinese employees based in several Chinese cities, including Beijing and Shanghai, away from their homes late Thursday and detained them. O’Connor was among the Australians.
The raids were part of an apparent crackdown on the firm’s operations to lure high-worth Chinese gamblers to its Australian casinos, Fairfax said.
Casino gambling is illegal on the mainland and Chinese law prohibits agents from organizing groups of more than 10 Chinese citizens to gamble abroad. The crime is punishable by up to three years’ imprisonment. The industry has been known to skirt the ban by touting destination packages.
Casino operators have sought to lure Chinese high-rollers who have avoided Macau since President Xi Jinping’s ongoing corruption crackdown deters visits to the offshore enclave that is the only place in China where casinos are legal.
In 2015, police arrested 13 South Korean casino managers and 34 Chinese agents for selling packages with free tours, free hotels and sexual services.
Crown declined to say why O’Connor was in China. Crown, founded by billionaire James Packer, has said in recent financial disclosures its “International VIP” business segment has surged in recent years thanks to ramped up overseas marketing.
It was not clear whether any of the staff had been charged. Australia’s Department of Foreign Affairs and Trade said it had been notified yesterday by China of the detentions and said consular officials were arranging visits. The department said the Australians had legal representation.
Crown said it was supporting the Chinese and Australian families of the detained employees. Headquartered in Melbourne, Crown has gambling interests in Australia, Macau, Manila, Philippines, and London.
Crown shares fell 14 percent to close on Monday at AU$11.15 ($8.47), the biggest single-day decline in the company’s history.
Grant Govertsen, a Macau-based analyst at Union Gaming, a gambling-focused investment bank and advisory firm, said such crackdowns are common in China.
“I think what people are losing sight of is the fact that these arrests happen all the time, several times a year with the Koreans, and it’s been going on like that for years,” Govertsen said. He said that the arrest of Australians “could represent a sea change, but it could also be business as usual.” AP