Macau casino tycoon Lawrence Ho said in an interview with the Financial Times that his former business partner James Packer had upset the Chinese government by recklessly flaunting the promotion of gambling in mainland China, where the practice is illegal.
Although authorities on the mainland generally tolerate discreet marketing activities relating to gambling, in several instances they have cracked down. In the most notable examples, employees at Packer’s Crown Resorts were detained last year allegedly in an overnight raid, and several South Korean casino employees were arrested in 2015.
“In all of those instances [Crown and the arrests of the South Korean casino employees], you had casino sales people running around offering credit, talking about collection… it wasn’t discreet,” he told the Financial Times in an interview.
“That’s what caught their attention: ‘like what the hell, you’re deliberately spitting on our faces’.”
There are currently 14 Crown employees in detention on the mainland, although several junior workers have been released on bail. It is believed that Chinese authorities are preparing charges against the group, but the exact nature of the charges will prove to be important.
According to the FT, Crown is hoping that any charges against its employees relate to the marketing of gambling on the mainland, rather than money laundering, which would likely result in harsher penalties.
Packer recently ended his partnership with Ho, leading to their joint venture, Melco Crown Entertainment, to dismantle. Packer’s withdrawal completed its final stage with a sale of his remaining stake back to Melco for USD1.16 billion, leaving the Australian billionaire to his domestic market.
Now he will focus on the development of an AUD2 billion integrated resort in Sydney aimed at high-roller gamblers, including those from the mainland.
Although Packer has previously denied that his withdrawal is in any way linked to the detention of the Crown employees, Angus Gluskie, the managing director of White Funds Management, a shareholder in Crown, told the FT that they were “critical to Crown’s retreat from Macau.”
“When that happened, they felt it was becoming increasingly difficult to run a viable business due to the regulatory headwinds,” he said.
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