Investors Freak Out After China Detains Crown Casino Employees
Eighteen Crown Resorts employees have been detained by Chinese authorities in what’s believed to be the start of a crackdown on the gambling and casino junket business. At least three of the detainees are believed to be Australians, including Jason O’Connor, the head of Crown’s VIP International team.
Details surrounding the whereabouts of the 18 and details about why they were actually detained are slim at this point. At a brief press conference Hua Chunying of the Chinese Foreign Ministry said only that the Crown Resorts worker were being in connection with gambling laws.
As of this writing, the Australians had not yet received consular visits, though those are expected to occur in short order.
While little is known about the fate of the Australian employees, even less is know about the 15 Chinese workers arrested in the raid. In an interview with Bloomberg.com Jeff Sikkema, the American husband of a Chinese national named Jiang expressed concern and confusion over the situation saying:
She’s not even in sales. I don’t understand why she was detained. There’s nothing to hide.
Sikkema is not the only one expressing concern about the incident. Investors in Crown Resorts, and other Chinese-facing casino and gambling firms, are in a state of panic, too. Crown Resorts saw the price of its shares plummet 3.7 percent when news of the raids broke. Other firms, such as Sands China Ltd. and Wynn Macau Ltd. saw similar drops.
The Chinese gambling operates, according to Bloomberg, in a gray area that’s left international gaming and casino companies open to exactly this type of this situation.
That said, the potential rewards for establishing a toehold in the Chinese gambling market is extreme that plenty of companies are willing to take their chances. The fate of the 18 detainees may well determine how much risk these firms are willing to take in the future.