Direct marketing is illegal in China
Stocks of South Korea casino companies Paradise Co. and Grand Korea Leisure fell dramatically after 14 of their marketing employees were arrested in China for allegedly trying to woo gamblers to their foreigners-only, Reuters reports. The Yonhap news agency said travel agency workers were also among those arrested.
Paradise shares fell 11.9 percent in the wake of the arrests, which took place the week of June 15. Grand Korea stocks fell 14.23 percent.
Direct marketing is illegal in China—the primary reason Macau casinos use junket operators to recruit high rollers from Mainland China. The suspects will face charges of violating foreign currency laws, according to the South Korean Embassy.
In the past year, a number of jurisdictions including the Philippines, Australia, Cambodia, Malaysia and Vietnam have targeted Chinese VIPs, who have fled Macau due to a crackdown on money laundering.
Earlier this year, Hua Jingfeng, a deputy director at China’s Ministry of Public Security, warned that authorities would prosecute operators from other countries who attempt to “attract and recruit Chinese citizens,” according to CalvinAyre.com.
