James Packer breaks his silence over Crown employees detained in China

CASINO mogul James Packer has spoken out for the first time about the arrest and detention of his staff in China, as his empire’s future hangs in the balance.

CASINO mogul James Packer is “deeply concerned” about the welfare of his staff detained in China, speaking out as the company’s share price tanks.

Crown Resorts’ majority shareholder and executive chairman has offered his first comments on the crisis that has engulfed his gambling empire, amid a Chinese crackdown on overseas tours for high rollers.

“I have sought regular updates on this issue and have asked Crown to do everything possible to contact our employees and to support their families, as we await further details from Chinese authorities,” Mr Packer said in a statement to Channel 7.

“I am respectful, that these detentions have occurred in another country and are therefore subject to their sovereign rules and investigative processes.”

Crown shares fell 14 per cent to $11.15 on Monday, the biggest single-day decline in the company’s history, wiping $632 million from Mr Packer’s net worth amid investor concern at the viability of his planned $2 billion Barangaroo casino. The success of that project is expected to depend largely on the patronage of wealthy Chinese gamblers.

First comments from James Packer re the arrests of Crown executives in China - is "deeply concerned" pic.twitter.com/lIbJv78dml

— Chris Reason (@ChrisReason7) October 17, 2016

The Chinese government has confirmed that a senior Crown executive has been detained along with two other Australians as part of an investigation of suspected gambling crimes.

The head of Crown Resorts Ltd’s VIP International team, Jason O’Connor, is believed to be one of 18 Crown employees being questioned by Chinese authorities, the company said in a statement to the Australian Securities Exchange.

The Chinese foreign ministry said in a regular briefing that Australians have been detained in Shanghai for suspected involvement in gambling crimes, but did not provide further details.

Fairfax Media reported over the weekend that police took the three Australians, who were visiting China on business, and local Chinese employees based in several Chinese cities, including Beijing and Shanghai, away from their homes late Thursday and detained them. O’Connor was among the Australians.

The raids were part of an apparent crackdown on the firm’s operations to lure high-worth Chinese gamblers to its Australian casinos, Fairfax said.

A MURKY INDUSTRY

Casino gambling is illegal on the mainland and Chinese law prohibits agents from organising groups of more than 10 Chinese citizens to gamble abroad. The crime is punishable by up to three years’ imprisonment. The industry has been known to skirt the ban by touting destination packages.

Casino operators have sought to lure Chinese high-rollers who have avoided Macau since President Xi Jinping’s ongoing corruption crackdown deters visits to the offshore enclave that is the only place in China where casinos are legal.

In 2015, police arrested 13 South Korean casino managers and 34 Chinese agents for selling packages with free tours, free hotels and sexual services.

Crown declined to say why O’Connor was in China. Crown, founded by billionaire James Packer, has said in recent financial disclosures its “International VIP” business segment has surged in recent years thanks to ramped up overseas marketing.

It was not clear whether any of the staff had been charged.

Australia’s Department of Foreign Affairs and Trade said it had been notified Monday by China of the detentions and said consular officials were arranging visits. The department said the Australians had legal representation.

Crown said it was supporting the Chinese and Australian families of the detained employees. Headquartered in Melbourne, Crown has gambling interests in Australia, Macau, Manila, Philippines, and London.

Grant Govertsen, a Macau-based analyst at Union Gaming, a gambling-focused investment bank and advisory firm, said such crackdowns are common in China.

“I think what people are losing sight of is the fact that these arrests happen all the time, several times a year with the Koreans, and it’s been going on like that for years,” Mr Govertsen said. He said that the arrest of Australians “could represent a sea change, but it could also be business as usual.”

— McGuirk reported from Canberra, Australia. Associated Press writer Kelvin Chan contributed from Hong Kong. With Dana McCauley, news.com.au.