Australian casino staff detained in China yet to be charged

CANBERRA, Australia – Two Australian executives of the country’s largest casino operator are in good health after being detained in China last week over suspected gambling crimes, but they still do not know if they will face any charges, an Australian official said Wednesday.

The head of Crown Resorts Ltd.’s VIP International team, Jason O’Connor, was among three Australian and 15 Chinese Crown employees detained on Thursday or Friday, Foreign Minister Julie Bishop said. They have been caught up in an apparent crackdown on overseas tours for high rollers.

Australian consular officials visited O’Connor and another Australian, whose name was not made public, in the Shanghai detention centre for the first time on Tuesday, Bishop said. The third Australian was a dual Chinese citizen who might have been travelling on his Chinese passport, she said. In that case, China would treat him as a Chinese national and he would not be entitled to Australian consular support.

“They are in good health. Their well-being is looked after,” Bishop told reporters. “It’s a detention centre, somewhat like a prison, so the conditions are adequate but not comfortable at all.”

“They have no complaints about the way they are being treated and we’ve passed on this information to their families,” she added.

Australia did not have specific details of the allegations under investigation, she said.

The Chinese can keep the employees in detention for up to 30 days before charging them. That period could be extended for another week to allow further investigation, Bishop said.

“It might be some time before we know what charges, if any, they are facing,” she said.

Jonathan Galaviz, chief strategist at Las Vegas-based Global Market Advisors — consultants in the casino, hospitality and airline industries — said China would likely move quickly with the investigation given its high profile.

The company was more likely to face sanctions than the employees, he said.

The investigation was part of a crackdown on Crown’s operations to lure high-worth Chinese gamblers to its Australian casinos, Galaviz said.

“This is the strongest telegraphing of a message to the industry that we really don’t welcome you trying to incentivize our citizens to get involved in casino gaming,” Galaviz said.

“Crown as a company has certainly been one of the more aggressive foreign casino companies that have been marketing in China,” he said.

China would not approve of Crown’s business plan to lure Chinese gamblers to pay for its $1.5 billion six-star Crown Sydney Hotel Resort, which opens in 2019, he said.

Planning of the raids was evident in that police swooped while the three Australian executives were in China, Galaviz said.

Crown’s largest shareholder and founder, James Packer, an Australian gaming mogul with a personal fortune estimated by Forbes business magazine at $3.6 billion, said on Tuesday that he was “deeply concerned for the welfare” of the detained employees. Bishop said she had personally briefed Packer.

The Chinese foreign ministry said the Australians have been detained for suspected involvement in gambling crimes, but did not provide further details.

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 has said in recent financial disclosures its “International VIP” business segment has surged in recent years thanks to ramped up overseas marketing.

Crown shares fell 14 per cent to close on Monday at AU$11.15 ($8.47), the biggest single-day decline in the company’s history. Shares inched higher on Tuesday to AU$11.34, then slipped more than 3 per cent in early trading on Wednesday to AU$10.99.