Stern warning from Beijing
Sixteen employees of Australian casino company Crown Resorts Ltd. were sentenced to prison terms last week after they pleaded guilty to gambling offenses.
??They included Jason O’Connor, marketing vice president, who did not dispute charges that he led the team in trying to drum up business for the Australian casino operator in China, which expressly forbids the marketing of casino entertainment on the mainland.
??According to media reports, 19 defendants including three Australians were convicted in Baoshan District People’s Court in Shanghai. Of the 19, three defendants who were released on bail last November were not fined or sentenced to prison. Eleven defendants were sentenced to terms ranging from five to 10 months, Crown said, with the higher sentence imposed on O’Connor. Based on time served—the employees were arrested last October—most should go home shortly.??
The 16 were also fined a total of $1.3 million, including $293,000 for O’Connor individually. Crown Resorts will pick up the tab. O’Connor, who is based in Melbourne, was also ordered to be deported when he completes his prison term.??
The group’s offenses included organizing gambling parties or being engaged in gambling as a primary business. The defendants could have faced up to three years in prison, the maximum sentence for such crimes, reported ABC News.??
The high-profile arrests—a stern warning from the Beijing government that it’s serious about keeping gambling activity out of Mainland China—caused Crown Resorts to step away from its international business to focus on the Australian market. In May the company controlled by media magnate James Packer said it raised $987 million selling off the last of its stake in a joint venture with Melco Entertainment in Macau. Crown, whose largest shareholder is the billionaire son of Kerry Packer, is itself developing a new AU$2 billion (US$1.5 billion) luxury resort on Sydney’s waterfront that will focus solely on high-stakes gamblers.
??In the past, the gaming industry has sidestepped China’s ban on promoting gambling junkets by hawking travel packages. “So long as you don’t mention gambling or credit, you’re fine, but that’s a very thin line,” said Sudhir Kale, CEO of GamePlan Consultants. “I think it was the lure of cutting out the middlemen that got them a bit into trouble.”
??The Australian Department of Foreign Affairs and Trade said consular officials would provide assistance to the Australians and their families until their release. That said, regulators in New South Wales and Victoria also could take punitive action against Crown for its breach of foreign law. ??
According to the Australian, Liquor & Gaming NSW and the Victorian Commission for Gaming and Liquor Regulation are both looking at the matter to determine if it warrants censure at home.??
Casino operators around the world court Chinese gamblers because of their love of the games and the value of Chinese high rollers. The latest crackdown is part of a larger campaign by the Chinese government to keep hundreds of billions of dollars from flowing out of the country. Even so, “a planned new wave of Asian casinos, from Japan to Australia, are poised to make a fresh push to attract business from China,” reported Bloomberg News.
“That makes it a lot more important that they make it clear what the rules are,” said Colin Hawes, associate professor at the law faculty of the University of Technology Sydney. “It’s more like a warning that they can’t be engaging in that kind of activity on the Chinese mainland.”
“Foreign casinos may take this as a caution and stop promotional activities in China for some time,” said Shanghai lawyer Si Weijiang. “It’s unlikely that such activity will disappear. When there is money to be made, there will be people trying to make the money.”??A chastened Crown released a statement saying it “remains respectful of the sovereign jurisdiction of the People’s Republic of China and does not intend to comment further at this time.”
