China Charges Crown Resorts Employees With 'Suspected Gambling' -- Update

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

Eighteen employees of Australian casino operator Crown Resorts Ltd., including senior executive Jason O'Connor, will go to trial June 26 in Shanghai on gambling-related charges, according to Chinese authorities.

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The detainees have been charged with "suspected gambling" and the trial will take place at Baoshan's Criminal Court No. 1, the Shanghai High People's Court said in a notice on its website.

Crown said the charges were related to the promotion of gambling and were filed against employees in custody as well as those who were released on bail after being detained in October. It didn't say how many had been released and said it wouldn't comment further, citing the pending court case.

Foreign casinos aren't allowed to advertise gambling directly in China, but they can entice gamblers by promoting their destinations more broadly.

As part of the court filing, the names of all 18 defendants were released for the first time. Three Australians and one Malaysian were known to be in custody, according to previous reports from their respective governments.

The other employees are local employees of Crown, according to interviews with family members and people close to the case. They include people in administrative, sales or marketing roles, some of whom were responsible for selling tour packages to visit Crown properties, these people said.

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Australia's Department of Foreign Affairs and Trade said authorities are continuing to provide consular assistance to the detained Australians, though it didn't answer any specific questions about their cases.

Mr. O'Connor oversaw Crown's international VIP operations, a job that included attracting foreign high rollers to its properties.

The charges come as the gambling industry continues to assess the fallout from the arrests. Casinos in Australia and New Zealand reported declines in their VIP businesses in the months after the arrests, suggesting Chinese high rollers--an important source of revenue for casinos--had cut back on their spending.

"The big question in the marketplace is will the Chinese continue to gamble, and have the charges against Crown reduced the level of gambling?" said Peter Cohen, a former gaming regulator in the Australian state of Victoria who now works at consulting firm The Agenda Group. At this point, "there's expected to be a slowing of the high-roller business, but the middle-class business seems to be unaffected by it."

Crown executives previously signaled that the company was cutting back efforts to attract lucrative Chinese high rollers to its Australian casinos. The company also recently sold down its stake in a casino operator in Macau.

Some observers weren't surprised by the detentions, given Chinese President Xi Jinping's recent crackdown on corruption among party officials, which had already thinned VIP play at overseas casinos.

Junya Qian in Shanghai contributed to this article.

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

(END) Dow Jones Newswires

June 13, 2017 03:04 ET (07:04 GMT)