Packer employees face a year in prison
An estimated $10 billion in gaming developments planned for Australia may be cut back, in part due to the 2016 arrests and detentions of 18 Crown Resorts employees working in Mainland China.
One of the proposed developments, an A$3 billion (US$2.3 billion) resort complex on the country’s Gold Coast, is still full steam ahead, says Louis Chien, director of ASF, the Chinese-Australian coalition building the project on the Southport Spit.
The complex will include “five- and six-star hotels, theaters, a beach club and a host of entertainment,” said Chien. “But the casino is the catalyst that makes the resort work.” ASF has been in talks with Crown to operate the gaming component.
But the arrest last year of 18 Crown employees in China may have a dampening effect on other development plans Down Under, reports the Financial Times. VIP turnover for Crown’s domestic resorts, which rely on high-rolling Chinese gamblers, fell 45 percent in the first 23 weeks of fiscal 2017, the news outlet reported. That precipitated a 12 percent decline in total revenue at the Australian resort company in the same period between July and mid-December 2016.
“A lot of these ambitious plans were conceived prior to the crackdown on corruption by the Chinese authorities, which has hit casino revenues in Macau and elsewhere,” said gaming expert Sudhir Kale. “Some of the Australian projects are likely to struggle to raise finance.”
One has already bitten the dust. The casino portion of a planned A$8 billion resort near Cairns has been shelved by Tony Fung’s Aquis Australia subsidiary. “The financial landscape has changed,” said Aquis CEO Justin Fung, son of the Hong Kong billionaire. “Beijing has been a bit stricter about allowing access of money into Macau, and the ability to raise funds for a project like this is directly impacted.”
Aquis, which already operates a casino in Canberra, says the Australian gaming sector must shift away from VIPs to domestic and international “premium mass market” punters.
Last October, Chinese police arrested 18 Crown employees including Jason O’Connor, head of Crown’s VIP International team, on suspicion of “gambling-related” crimes. Direct marketing of casinos to Chinese nationals is illegal in Mainland China, but some companies have tried to sidestep that rule by marketing resort and tourism services where the casinos are located. The Crown employees, apprehended in a series of overnight raids in four Chinese cities, are now being held at the Shanghai Detention Center, reportedly in deplorable overcrowded conditions. Some news reports indicate they may face more than a year behind bars.
Crown’s subsequent drop in VIP revenues has observers speculating about the fate of boss James Packer’s pet domestic project, the planned A$2 billion casino resort at Barangaroo on the Sydney waterfront. But Packer has said he’s committed to Sydney and his other interests in Australia. And to prove it, he recently offloaded more than half his company’s stake in Macau-based Melco Crown Entertainment for A$1.6 billion.
