Crown Resorts Trial Draws Closer in China -- WSJ

By Wayne Ma in Hong Kong and Mike Cherney in Sydney Features Dow Jones Newswires

China assigns cases against 18 employees of the casino operator to district-level court

Continue Reading Below

Chinese authorities have handed over the criminal cases of 18 employees of Australian casino operator Crown Resorts Ltd. to a district-level prosecutor's office, bringing them one step closer to trial after being detained for more than half a year, according to people familiar with the case.

The assignment to a district-level jurisdiction, Shanghai's Baoshan District People's Procuratorate, as opposed to a higher one at the city or national level, could mean that criminal charges might be limited to gambling offenses, according to a person close to the case. Gambling offenses in China carry a maximum sentence of three years.

"You're going to have less in the way of judicial and prosecutorial resources," a second person close to the case said, adding that this could "signal the intention of lesser charges."

A Crown spokeswoman had no immediate comment.

Nicolas Groffman, an attorney at Harrison Clark Rickerbys who has worked on similar cases, said the district-level court has more sentencing restrictions than a higher-level court. However, he cautioned it has the same authority when it comes to bringing charges for any offense.

Continue Reading Below

The move to a district-level prosecutor's office was first reported by the Australian Financial Review.

While specific charges haven't been detailed, the Crown employees were detained on suspicion of committing gambling-related crimes, according to the Australian government and people familiar with the matter.

They were taken into custody by China authorities beginning on Oct. 13. The detained include Australian citizen and senior Crown executive Jason O'Connor; two other Australians, one Malaysian and a number of Chinese nationals.

One of the Chinese detainees was later released on bail.

Foreign casinos have become increasingly dependent on Chinese high-rollers, devoting significant resources to attract their business. But under Chinese law, foreign casinos aren't allowed to promote gambling in China.

Now that the case has been handed over to the prosecutor's office, it might take as long as four and a half months before the start of a trial and a list of charges, a person familiar with the case said. Mr. Groffman said the process could take as long as six and a half months.

The Malaysian consulate in Shanghai had no update on the status of the Malaysian detainee, a consulate official said.

Australia's Department of Foreign Affairs and Trade said it has been providing consular assistance to the three Australians detained in Shanghai since Oct. 14.

"The investigations and detentions are ongoing and proceeding in accordance with Chinese law," a representative for the department said. "China's legal and judicial processes can be lengthy. Due to privacy obligations, we are unable to provide further comment on the individuals."

Since the detentions, Crown has scaled back its ambitions in China and focused on its assets in Australia, where it is adding to its portfolio by building a new waterfront resort and casino in Sydney.

The company signaled in February that it is reducing efforts to attract Chinese high rollers, and said VIP play fell 45% at its Australian casinos in the fiscal first half of the year.

The China episode is being felt across the region's casino industry, where attracting gamblers from China had become a focus of efforts in recent years. On Wednesday, chief Crown competitor Star Entertainment Group Ltd. said that international VIP "business volumes continue to be impacted" after the detentions.

--Rob Taylor contributed to this article.

Write to Wayne Ma at wayne.ma@wsj.com and Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

May 04, 2017 02:47 ET (06:47 GMT)