China formally arrests Crown staff amid gambling crackdown

[SHANGHAI] A group of Crown Resorts Ltd employees detained in China since last month have been formally arrested for alleged gambling-related crimes, according to a lawyer, paving the way for them to be prosecuted as the government clamps down on foreign casinos that woo its citizens to gamble overseas.

The employees were arrested last Friday and will be held for another two months for investigations, which could be extended as needed, according to Zhai Jian, a Shanghai-based lawyer who said his firm, Dacheng Law Offices, represents a group of Crown employees.

Mr Zhai said he represents an employee who is of Malaysian nationality. Police will decide whether to prosecute the employees after the investigations conclude, he said.

The detentions last month signal the government in Beijing is again focusing on overseas casino operators with marketing operations in China, after arresting South Korean gaming workers last year. The arrests also highlight the challenge for casino operators working in China, where it's illegal to entice Chinese citizens overseas to gamble.

"The key message from the Chinese government is that it will take the policy on the gaming industry more seriously," said Richard Huang, a gaming analyst for Nomura International. "The law has always been there to forbid gambling marketing. Now the government is vigorously enforcing the regulation." Macau, a special administrative region, is the only Chinese city where casinos are legal. Elsewhere in the nation, it's illegal to organise people to gamble, operate a casino or make a living from such activities. The punishment is no more than three years in jail.

Of the 18 Crown employees detained in mid-October, one - a Chinese national who Crown said was a junior employee - was released on bail earlier this month. All the detained employees who have not been released have been formally arrested, said Mr Zhai, who declined to specify how many of those arrested his firm represents.

A spokeswoman for Crown in Melbourne didn't respond to e-mailed questions about Mr Zhai's comments.

Crown's shares plunged the most on record Oct 17 on the news that its staff, including three Australians and a Malaysian, were detained in China. Among them was Crown's head of international high-roller operations Jason O'Connor.

Australia is continuing to seek official confirmation of the status of the Crown employees within the Chinese legal system, Foreign Minister Julie Bishop said in e-mailed statement Monday, while Australian Trade Minister Steven Ciobo said in a Bloomberg TV interview the country continues to offer consular support to the Crown detainees.

Chinese authorities had warned Crown last year to halt its efforts to attract high rollers from the mainland to gamble overseas, a person familiar with the government's decision to detain the Australian company's employees said last month.

Australian Financial Review reported Monday that three Australian employees of Crown Resorts, along with 13 other China-based employees of the company have been formally arrested. A fourth Australian, who is believed to work for a junket operator, was also arrested, the paper reported.

BLOOMBERG