China’s detention of eighteen employees working for the Australian gambling operator Crown Resorts Ltd. has sparked concerns in the global gaming industry. The arrests took place earlier this month and were part of an investigation into potential gambling-related crimes. Jason O’Connor, the executive who is in charge of Crown Resorts’ international high-roller operations, is among the detained.
So far, Chinese authorities have refused to elaborate with details concerning the arrests. Charges have not been made public at the present moment.
Industry insiders warn the Crown Resorts arrests may signal China’s intention to enforce stricter regulations that prohibit foreign companies from marketing and promoting gambling on the country’s territory. According to legal experts, the incident should serve as a forewarning to other foreign companies doing business in the country.
In the words of legal expert Dan Harris, China has finally begun to “step up its game” and is planning to enforce stricter rules for companies failing to comply with its laws. According to Harris, this was not the case a decade and a half ago when the country did not have the regulations in place to detain violators.
The arrests have spawn global concerns among gambling venue operators from Macau to Las Vegas. Jan Jones Blackhurst, the government relationships executive of Las Vegas’ Caesars Entertainment Corp., disclosed many gambling operators plan to back off until they fully understand the concerns of the Chinese authorities.
Analysts report Chinese players contribute less than 10% of the revenue to the casinos in Las Vegas and about 15% of Australian operators’ revenue. Chinese players have a much bigger impact on the markets in Asia where casinos are exclusively being opened to cater to their tastes. According to reports released by brokerage and investment firm CLSA, the contribution of Chinese players towards gambling revenue in the Philippines amounts to 25%, 80% in Saipan and Macau, 60% in South Korea and 30% in Singapore.
However, the anti-corruption campaign led by China’s president Xi Jinping is said to have impacted high-roller gambling tables negatively. It is important to note high-roller tables account for as much as 50% of the overall revenue in Asian gambling venues. China’s special administrative region, Macau, is said to have suffered the most by Jinping’s anti-corruption campaign. Australia seems to be less affected, with a 35% increase in high-roller gambling revenue for the past two years.
Currently, Crown Resorts’ representatives have not disclosed more detailed information concerning their employees’ arrest. It is understood a number of Crown Resorts’ customers have also been subjected to questioning on behalf of Chinese authorities. The Chinese mainland authorities have seized documentation concerning the movement of millions of dollars along with computer and devices, belonging to the those arrested.
Australia’s foreign minister Julie Bishop revealed her department does not have further information regarding the potential charges the detained employees might face. Bishop commented the cause for the arrests is possibly rooted in President Jinping’s “anti-corruption campaign involving government officials.”
Tony Tong, vice chairman of the Macau Gaming Information Association, believes the detention will have a “very big impact” on the global gambling industry. Many foreign casino operators have already withdrawn their marketing staff from China.
