Race to free Crown Resorts’ staff in China

Crown still has no details about why 18 of its staff were detained in a Chinese crackdown on gambling promotions.

Jason O"Connor, head of Crown’s international VIP prog­rams, has been detained in China.

James Packer’s Crown Resorts and Australian diplomats will renew efforts today to make contact with 18 staff arrested at their homes in China four nights ago in a crackdown on gambling promotions.

Staff face jail terms of up to 10 years, depending on the seriousness of any offences committed.

Crown confirmed yesterday that Melbourne executive Jason O’Connor was arrested and ­detained in Shanghai on Thursday night, soon after arriving on a business trip.

However Crown said today it had still not been able to speak with its employees and had yet to be given details about why they had been detained.

The drama smashed Crown shares after this morning’s opening. The company’s stock slumped 11.7 per cent to a four-month low of $11.43 and was on track for its worst day since November 2008.

Crown’s rival Star Entertainment also suffered as investors fled gaming stocks. Star Group was down 5.4 per cent to $5.42.

A family man in his late 40s, Mr O’Connor is the head of Crown’s international VIP prog­rams, which aim to lure Chinese high rollers to Crown’s Melbourne and Perth casinos. Two other detainees are ­believed to hold Australian passports but do not live in Australia. Crown found out about the ­arrests only after the employees failed to show up for work on ­Friday morning.

The husband of Shanghai-based Crown employee Jiang Ling has told how she was confronted by five plain-clothed police officers outside her apartment. “I kept saying ... ‘Why are you here?’ They kept repeating ‘Oh, your wife knows’ and she didn’t obviously … they finally said ‘gambling’,” Jeff Sikkema, an American expatriate, reportedly said. “The main thing that I understood ... they wanted to know was who her boss was and some of her other colleagues, just looking for names.”

Ms Jiang was taken to a police station for more questioning and is believed to be still in detention.

The Department of Foreign Affairs and Trade has been working to seek more information on the arrests. Under a bilateral treaty, China is obliged to inform Australia of ­details of the detention of any ­citizens within three days.

While it is not clear why the executives have been detained, the Chinese anti-laundering authorities have targeted the activ­ities of casino operators in the gambling centre of Macau.

The promotion of gambling is prohibited in China, so only the hotel, restaurant and entertainment facilities of casino resorts can be marketed, even though gaming usually subsidises these other aspects of the business.

“Consular officials will seek to offer appropriate consular assistance to the detained Australians in accordance with the consular services charter,’’ a DFAT spokesman said yesterday.

A Crown spokeswoman said: “To date, Crown has not been able to speak with our employees and is working closely with DFAT to urgently make contact and ascertain their welfare.

“Crown is staying in close contact with and is providing support to the families of our employees in China and Australia.”

A Chinese Foreign Ministry spokesman said last night: “We understand from our legal ­department that some Australians have been detained and are under investigation over suspic­ions relating to a gambling case. That investigation is ongoing.”

It is believed Crown’s entire Chinese marketing team was ­detained in the raids across four cities.

Mr O’Connor, an accountant, has worked for Crown for six years, mostly in his current role. He was educated at Monivae ­College at Hamilton in western Victoria, the alma mater for well-known figures including indigenous leaders Mick and Pat Dodson, barrister Allan Myers, actor Aaron Pedersen and slain Adelaide Crows coach Phil Walsh.

While Mr O’Connor is ­described as experienced and holding a good reputation, it ­appears he may have fallen foul of China’s ill-defined gaming regul­ations, or meet-and-greet functions in which he was involved may have given that perception.

Employees and independent contractors of casinos who operate in China are expected to ­refrain from staging promotional activities, which usually involve banquets or dinners, for groups of more than 10 people.

These promotions should not involve government officials or military personnel. And no mass advertising is permitted.

All the major casino operators in Australia — Crown, The Star and SkyCity — employ staff or contractors in China to encourage high rollers to play, whether via “junkets”, packaged visits by gamblers in which the organisers wear some of the risk of default, or via individual players.

It is believed that most of these employees have temporarily left mainland China for Hong Kong, Taiwan or elsewhere in the ­immediate wake of the Crown ­arrests.

In June last year, 13 South ­Korean citizens and 23 Chinese were arrested for illegally luring gamblers to travel to play at the eight casinos on the country’s southern island of Jeju, which are only accessible by foreigners.

It is believed that the South Koreans were expelled, and the ­Chinese remain in detention.

The biggest challenge for the casino employees or agents is to arrange credit terms for high rollers, often involving 60 days for repayment.

Arranging credit terms would appear automatically to infringe the law against promoting gambling, but without doing so it is hard for a casino to operate. And Chinese customers have become crucial for Australian casinos, ­including Crown.

China also forbids the collection of gaming debts in China, so players need to satisfy casinos that they can meet any debts from financial sources outside the country.