Crown employees detained in China formally charged

The Crown Resorts staff detained in China have officially been charged with “promotion of gambling” offences.

The James Packer-backed company released a statement revealing “all its detained employees in China as well as those employees released on bail have now been charged with offences related to the promotion of gambling and their cases have been referred to the Baoshan District Court.”

Crown Resorts also noted in the release, since “the matter is now before the court, no further comments will be made.”

Last year around 19 employees and associates – there are conflicting reports on the number of people involved – had their accommodation raided during a visit to mainland China.

A number of communication devices were also seized after Chinese authorities were tipped off about the group “aggressively” targeting Chinese high rollers.

The staff were arrested and detained in a Shanghai detention centre, with local media outlets reporting it was due to gambling-related crimes.

But no official charges were filed and the fate of the staff behind bars remained unknown.

While more details began to emerge – including the revelation two of the detained were former employees of Crown, three junior staff had been released in November, and four of the remaining prisoners detained are Australian – their exact crimes were still not known.

Last month progress was finally made and it became clear the group would likely be charged for gambling-related crimes when the case was handed to a local prosecutor.

Since it is not being handled on a city or national level, lawyers suggested it meant they would be charged with less serious offences – opposed to anti-money laundering or other criminal violations which hold lengthy jail sentences.

A trial date will now be set and a verdict will be handed down to the employees.

A prison sentence could mirror the outcome of the case where 14 staff of South Korean Paradise Co. and Grand Korea Leisure Co. were detained in China in 2015 for similar violations. The group served 18 months before being released.

It is illegal to gamble on mainland China and advertise real money gambling services to Chinese nationals.

However, VIP revenue is often the main source of profit for casinos, including Crown Resorts, and high rollers from the mainland largely contribute.

After the employees were detained, Crown Resorts reported a significant drop in VIP revenue which could indicate the incident had prevented foreign customers from visiting or the marketing tactics were worth the risk.

But once the risk turned into a reality, Crown did some major reshuffling and scaled back its Chinese ambitions.

Crown Resorts’ former president of international marketing, Michael Chen, was not caught up in the raids but he was named the man behind the marketing push into China. He was on permanent leave following the arrests and then resigned in April.

A new chairman, John Alexander, was also appointed after Robert Rankin stepped down at the beginning of the year. Alexander has helped cut costs in the wake of the revenue drop.

Crown Resorts also began focusing more on its Australian assets by selling its final stake in its Macau joint venture, Melco Crown Entertainment.

Only days after the sale, Crown Resorts’ former business partner, Lawrence Ho, slammed casino operators for aggressively targeting Chinese high rollers and “deliberately spitting in the face” of Chinese authorities.

“In all of those instances, you had casino sales people running around offering credit, talking about collection . . . it wasn’t discreet,” Ho said.

A Macau junket operator also said the casino staff were too “aggressive” in targeting Chinese gamblers, just a month after the arrests.

He added the lack of a junket middleman was where they went wrong.