Oct 18, 2016

    China detains Australia's Crown Resorts' staff


    AUSTRALIAN casino giant Crown Resorts said yesterday China had detained 18 of its employees, including three Australians, sending gaming stocks tumbling on concerns about their strategy for luring Chinese gamblers.

    The Sydney-listed company, 53 per cent owned by billionaire James Packer, added that it had not made contact with its staff, including Australia-based head of international VIP gambling Jason O'Connor.

    It was not aware why they had been detained.

    China's Foreign Ministry told Reuters that it had detained some Australian nationals for suspected "gambling crimes".

    Crown shares fell 14 per cent, their biggest ever one-day decline, while smaller Australian rival Star Entertainment Group dropped as much as 6 per cent. The dip is amid concerns about the impact the move would have on their ability to attract wealthy Chinese gamblers to major new developments in Australia.

    Vitaly Umansky, an analyst at Bernstein in Hong Kong, said the detentions appeared to be a repeat of China's crackdown on South Korean casino marketing efforts a year earlier.

    "The Chinese government seems to be making a clear statement about its view on gaming activity being offshored to foreign jurisdictions, while Macau is not being targeted in the same way," he noted.

    Thirteen South Korean casino managers were arrested in China in 2015 for offering Chinese gamblers free tours, free hotels and sexual services.

    Melbourne-based Crown holds a 27 per cent stake in Melco Crown Entertainment based in Macau.

    It relies heavily on Chinese gamblers at its Australian operations.

    Analysts said the detentions suggested Crown had misread the enforcement climate about marketing its venues on the mainland.

    Most other operators have toned down their marketing in China over the past two years, focusing on live shows, restaurants and accommodation. REUTERS