Crown Employees Charged in China With Promotion of GamblingBy
Head of high-roller operations, 18 others due in court June 26
Detentions triggered concerns of crackdown on casino operators
Crown Resorts Ltd. said its staff held in China have been charged with gambling-related offenses, the most significant development in the case since the employees were rounded up by mainland authorities in October.
All the workers, including those released on bail, have been charged with offenses related to the promotion of gambling and the cases have been referred to the Baoshan District Court, Melbourne-based Crown said in a statement on Tuesday.
Crown’s head of international high-roller operations, Australian Jason O’Connor, Malaysian national Alfread Gomez and 17 others are due to appear in court on June 26 at 9:15 a.m., according to a notice on the Shanghai court’s website. It’s illegal to gamble or promote gambling in China, other than in Macau, and the detentions raised concern of a renewed clampdown on overseas casino operators that woo Chinese citizens offshore to gamble.
The case’s progression may mark the beginning of a resolution for Crown after the crackdown triggered a slump in high-roller gambling at the company’s Australian resorts and upended the company’s international operations. Billionaire James Packer, who’s the biggest shareholder, returned to the board, replaced the chief executive officer, and made resolving the situation in China his top priority.
The case is key not only because it might shed light on why Crown’s staff were targeted, said Ben Lee, Macau-based managing partner at Asian gaming consultancy IGamiX. Gaming authorities in Australia are also likely to assess the outcome to determine whether Crown is allowed to continue holding casino licenses at home, he said.
Crown shares fell 0.2 percent to A$12.84 at 1:32 p.m. in Sydney. The shares have jumped 11 percent this year as the company pulled out of Macau, announced a special dividend and pushed on with a stock buyback.
The case is Australia’s highest profile corporate clash with Chinese authorities since 2010. Stern Hu, the Australian who led Rio Tinto Group’s iron-ore unit in China, was found guilty in March of that year of bribery and stealing commercial secrets and sentenced to 10 years in prison by a court in Shanghai.
Australia’s Department of Foreign Affairs and Trade said Tuesday it continued to provide three detained Australians with consular assistance.
Crown’s high-roller gaming in Australia cratered as the crackdown deterred VIP gamblers from visiting its casinos. Packer scrapped a spinoff of overseas assets and sold Crown’s stake in Macau casino operator, formerly known as Melco Crown Entertainment Ltd. Also binned: a proposed initial public offering of a trust holding Crown’s Australian hotels.
Under John Alexander, who replaced Rowen Craigie as CEO in February, Crown is focusing on its hotels and casinos in Australia, including a new A$2 billion ($1.5 billion) luxury resort on Sydney’s waterfront.