As China Trial Looms, Crown's Offshore Network Seems to VanishBy and
Hong Kong appears to be sole Asia office that remains open
Crown Resorts staff set to appear in Shanghai court on June 26
Crown Resorts Ltd.’s operations in eight Asian countries are suddenly hard to find.
Since the Australian casino operator’s staff were detained in China last October and accused of illegally promoting gambling, Crown’s network of offices from Macau to Indonesia appears to have vanished.
Visits to seven of the eight premises showed offices that appeared to be shuttered. With 19 individuals due to appear next week in a Shanghai court, references to all but one of Crown’s representative offices outside Australia have been removed from the company’s website, leaving just Hong Kong. Phone numbers for those offices, previously listed online, won’t connect or are answered by individuals who no longer represent Crown.
The apparent retreat underscores the scale of the fallout from the detentions, which fueled concern that China was clamping down on overseas casino operators that drum up business on the mainland. Any scaling back of international marketing might weaken Crown’s ability to attract big-spending gamblers from overseas.
When asked about the office closures, employees affected and what prompted the changes, a representative for Crown in Melbourne said the company had no comment. The company also declined to comment on whether it would be tougher to attract high-stakes players to Australia without offshore offices.
A dismantling of its overseas office network would be the latest sign of a strategic reversal at billionaire James Packer’s Crown in the wake of the China arrests. New Chief Executive Officer John Alexander is focusing on Crown’s hotels and casinos in Australia, including a new A$2 billion ($1.5 billion) luxury resort on Sydney’s waterfront. That new resort is focusing on high rollers, even after turnover from so-called VIPs slumped since the crackdown.
In Vietnam, the former Ho Chi Minh City office is empty, and a woman who said she was Crown’s former representative said it closed about six months ago. Staff at a building in Bangkok say Crown vacated the premises this month. There’s no trace of Crown at its former premises in Taipei and Jakarta.
In Singapore, Macau and Kuala Lumpur, the Crown offices were closed during business hours and neighboring tenants or building management say the offices appear to have been shuttered in the past few months. Meanwhile in India, where Crown previously listed just a phone number for its representative office, a man who identified himself as Nilay Singh said he no longer works for Crown as its head of marketing in the country.
A Crown staff member at the company’s Hong Kong premises, which mainly handles payments, said it was business as usual there. The woman, who asked not to be identified as she’s not authorized to speak to media, said Crown had not notified the Hong Kong office of any changes at other offices in Asia.
According to Internet Archive, a non-profit that’s a repository of cached web pages, Crown’s multiple offices were listed as recently as May 3 on its website but had disappeared by May 27.
Crown, with Packer as its biggest shareholder, is focusing on its Australian resorts after selling out of its Macau venture with Lawrence Ho. Packer has since returned to the board and has made resolving the situation in China his top priority.
The overseas marketing offices helped to funnel visitors to Crown’s resorts in Australia. More than one third of the revenue at the Melbourne and Perth resorts in the year ended June 2016 was generated by international visitors, predominantly from mainland China, according to Crown’s latest annual report.
Closing down international offices could be aimed at mitigating perceived risks in using Asian locales to market to Chinese gamblers, said Sudhir Kale, who has worked on projects for Crown and other large casinos as head of GamePlan Consultants in Queensland.
Crown is sending a signal that, “‘Hey, we have shut down most of our offices. We’ve learnt from the experiences. And not just in China, but in other markets, we are taking the appropriate steps to prevent these things from happening again,”’ Kale said.
Crown shares have dropped 0.8 percent in the period since the news of the detentions in October through Tuesday. That trails a 6 percent gain by Australia’s benchmark index.
Crown said June 13 that the detained workers in China have been charged with offenses related to the promotion of gambling. Among those scheduled to appear in a district court on June 26 is the company’s head of international high-roller operations, Australian Jason O’Connor.
It’s illegal to run a casino or promote one anywhere in China, other than in Macau, the world’s biggest gambling market.
Crown isn’t alone in exercising caution. The company’s main Australian rival, Star Entertainment Group Ltd., closed its doors to new business from China in the wake of the detentions. Star stopped chasing new customers in China or even taking calls from unknown parties, CEO Matt Bekier said in February.
Star is pushing ahead with a plan to generate more income from Southeast Asia to reduce reliance on China. The most lucrative markets are Singapore, Malaysia, Indonesia and Thailand, Bekier said then.
— With assistance by Sterling Wong, Busaba Sivasomboon, Harry Suhartono, En Han Choong, Samson Ellis, and Mai Ngoc Chau