Jenny Jiang, who was among 19 Crown Resorts employees arrested and jailed in China for illegal promotion of gambling there, wonders why she hasn’t been called to testify in ongoing government probes of the company.
Jiang has been described as the whistleblower in the case, which led to investigations of Crown activities in three states: New South Wales (NSW), Western Australia and Victoria.
In October 16, Jiang was an administrative assistant working for Crown in Shanghai. She was arrested with 18 colleagues for breaking Chinese law, which forbids the promotion of gambling on the mainland.
“I am a critical witness,” Jiang told a local news station. “I have a lot more to say, but nobody has asked me.”
She said she can “provide firsthand evidence of Crown’s operations in China and of the consequences of those operations. I can also give evidence about the human cost of the Crown’s conduct, which the royal commission needs to hear in order to do its job properly.”
According to Asia Gaming Brief, commissioners said they were unlikely to call Jiang, as they had already obtained “extensive information relating to topics of relevance for Ms. Jiang.”
Meanwhile, by inadvertently turning a spotlight on itself, Crown has ensured that every casino operator in the country also will face greater scrutiny by regulators. Inquiries in several states have called Crown’s suitability into question, to the extent that the company was barred from opening its casino in Sydney and also has become a hotly pursued merger target.
According to a new report by Fitch Ratings, those operators will face greater regulatory oversight and increased operating costs.
The report, “What Investors Want to Know: Australian Gaming” was published June 24.
“We expect compliance costs for gaming operators to climb given the heightened scrutiny, which is likely to increase regulatory oversight and investment in compliance systems,” the report said.
“Some elements of the operators’ businesses may also be forced to cease, which could dampen their overall revenue generation ability and margins.
“We also believe the gaming operators will be required to increase their contributions to pay for the greater regulatory oversight. One of the recommendations out of the NSW inquiry was the creation of a specific gaming regulator, which would be funded by the operators – mainly Crown and the Star.”
On the bright side, Fitch said it doesn’t expect declining VIP revenues due to recent junket bans to have a long-term negative impact on profits, since Australian casinos rely primarily on domestic customers.
“The cessation of junket operations will shrink VIP revenue,” Fitch said. “In particular, operators will find it difficult to cater to Chinese VIPs, as China prohibits the direct promotion of gaming activities and junkets are used to facilitate international play. We believe a fall in Chinese visitation will significantly affect VIP revenue.
“However, VIP has historically made up a smaller proportion of Australian gaming operators’ revenue than domestic mass-market gaming, which remains stable. This should limit the impact of any decline in VIP revenue for operators.
“Domestic mass market performance has been stable over the past few years, with declines in 2020 due to the closure of the properties under pandemic-related restrictions. Most properties have reported a healthy return to profitability following their reopening progressively over 2H20, highlighting the market’s resilience, even when operating under social-distancing restrictions.
“We expect such restrictions will have a greater impact on gaming operators over the short term, as they are at the forefront of closures when governments are seeking to contain a Covid-19 outbreak, rather than other restrictions that more so impact the VIP market.”
