Wooing the High-Rollers Leads to Australian Arrests

(Photo: Calvinayre.com)

In worrying news for the casino industry, Australian giants Crown Resorts are reeling this week after 18 employees were arrested in China as part of a crackdown against the junket operators who bring the million-dollar-spending high-rollers to town.

The unprecedented detentions saw the company’s stock fall 10 per cent as the employees, including Jason O’Connor, the head of Crown’s VIP International team, was named as among those being questioned by Chinese authorities.

According to a Crown Resorts statement, the company hasn’t been able to speak with their staff, three of whom are believed to be Australian citizens, and are working with Australia’s foreign ministry to make contact with the group.

“Crown is staying in close contact with and is providing support to the families of our employees in China and Australia,” Crown said it hasn’t been told why the employees have been detained.

With over one-third of the revenue for Australian casinos coming from international visitors, it has sparked serious concerns among the industry at large. The Chinese contingent among the high-rollers is the largest of all visitors and there are worries that the Chinese crackdown announced earlier this year could “jeopardise returns”.

According to Bloomberg news:

"Australia’s foreign ministry is aware of reports of the possible detention of a number of Crown employees across China overnight on Oct. 13 to Oct. 14, including three Australians,” the casino group said in an e-mailed statement. “Chinese authorities have three days in which to notify of the detention of Australians, according to the terms of a bilateral consular treaty,’ it said.”

Similar arrests amid a crackdown on the Macau junket operators saw a two–year slump on the island, only recently reversing following a decision to focus less on the huge Chinese high-roller market and instead on recreational and tourist gambling.

Macau is the only place in China where gambling, and gambling promotion, is legal, but, the casino industry still operates and advertises ‘under the radar’ for fear of attracting the kind of attention Crown have faced this week.

It’s not been a great week for casinos and their attempts to keep the big-spenders coming through the doors. As I reported recently, the Sands Corporation are under investigation following a special Reuters report which blew a low-profile case open to the public, looking closely into the ties between casinos such as Sands, the high-rollers who keep the casinos afloat – and the various middlemen (and women) who both sides use to keep the cash machine rolling.

Two middle-aged Chinese women - Xiufei Yang, 59, and Meie Sun, 52 – who the Las Vegas Sands Corporation have been chasing to recoup $6.4million in unpaid baccarat debts – claimed in court that Sands personnel were actually well aware that the massive lines of credit, about $6million, were actually intended for high-rolling businessmen, and the women were merely stooges – or shills – to keep the deals below the radar of federal anti-money laundering rules and officials.

Prosecutors are apparently now intending to ‘pursue the charges through a grand jury, rather than before a judge’, but Nevada Gaming Control Board officials are now looking into Sands’ role in the case.