Crown Resort shares post record fall as China detains casino staff
Billionaire James Packer’s Crown Resorts plunged by a record 14 per cent in Sydney trading after Chinese authorities detained 18 of the casino company’s employees, including the head of its international high-roller operations.
The shares tumbled A$1.80 to close at A$11.15 on Monday, the steepest decline since Melbourne-based Crown’s listing in December 2007, according to data compiled by Bloomberg. About US$1 billion in market value was wiped out, and gaming stocks across Asia also fell amid concerns of a fresh Chinese crackdown on courting citizens to gamble in overseas casinos.
Jason O’Connor, who leads Crown’s VIP international team, is among those being questioned, the company said in a statement. The roundup also included a Shanghai employee who processed visa applications for Crown’s big-spending clients, and the detained group is due to meet Crown’s legal team in Shanghai Monday, according to her husband.
More than one third of Crown’s revenue at its Australian resorts comes from international visitors, predominantly mainland Chinese, and the firm is building a high-roller casino resort at Barangaroo on Sydney’s waterfront.
The incident “suggests there’s going to be some kind of crackdown”, said Daniel Mueller, an analyst at Forager Funds Management in Sydney. “Any setback could jeopardise returns on Barangaroo.’’
A Chinese government campaign against corruption led to a more than two-year decline in gambling revenue in Macau, where Crown is exposed through a stake in casino operator Melco Crown Entertainment. The detentions late last week signal the government in Beijing is again focusing on overseas casino operators that have marketing operations in China, after arresting Korean gaming workers last year.
The Australians are being detained for gambling-related crimes based on China’s laws, the country’s foreign ministry spokeswoman Hua Chunying said at a briefing in Beijing. Three Australian citizens being detained in Shanghai will receive consular visits, the country’s foreign minister Julie Bishop said in an emailed statement.
Among the Crown employees detained is Jiang Ling, a Shanghai resident who has worked for the Australian company for more than five years and processes applications for high-rolling gamblers, according to her American husband, Jeff Sikkema. He hasn’t been able to reach Jiang, a Chinese national, since she was taken late Thursday and he’s especially concerned about China’s high conviction rate. He emphasised Jiang has a purely administrative role.
“She’s not even in sales,” Sikkema said. “I don’t understand why she was detained. There’s nothing to hide.”
Jiang’s detention notice, seen by Bloomberg, shows she is being held by Shanghai police for alleged “gambling crimes”.
In June last year, Chinese officials arrested 14 South Koreans, including employees of casino operators Paradise and Grand Korea Leisure for allegedly marketing to Chinese gamblers, according to Yonhap News agency.