Australian casino operator Crown Resorts Limited was reportedly warned by Chinese law enforcement officials last summer to stop all of its efforts at trying to attract high-roller gamblers from the mainland to gamble overseas.
The Melbourne-based firm saw 18 of its representatives detained by police in Shanghai over the weekend for alleged gambling-related crimes following several months of investigations as part of an operation dubbed “Duanlian”, which in Chinese translates as “to break the chain”.
According to a report from the Bloomberg news service citing “a person familiar with the government’s move”, the 2015 warning followed the arrests of employees from South Korean casino operators Paradise Group and Grand Korea Leisure Company Limited on similar charges. After receiving the caution, senior executives from Crown Resorts Limited reportedly began making shorter business trips to China instead of spending long periods in the country. Chinese officials also supposedly observed that the company had shifted its marketing activities to focus more on resorts instead of casinos although local police felt that neither of these moves had amounted to a material change in the operator’s activities.
The news service reported that the “Duanlian” operation is hoping to curtail Chinese nationals from engaging in overseas gambling by terminating the personal and financial links between foreign casino operators and their mainland clients. The nation’s leaders led by President Xi Jinping perceive that the activity is linked to corruption, money-laundering and domestic instability particularly as many of the gamblers that have gone broke as a result of gambling have been small business owners.
Bloomberg explained that Crown Resorts Limited is being investigated over allegations that it enticed Chinese nationals to gamble in Australia and possibly used an illegal settlement network or other underground banking services to transfer money out of the country. In an operation this summer in Guangdong Province, police arrested almost 800 people for crimes including “organizing illegal gambling activities overseas” while raiding an underground bank that turned up more than $3 billion.
Although detention and the filing of charges will not necessarily lead to prosecutions, Australian Foreign Minister Julie Bishop explained on Tuesday that representatives from her office had visited two Australian Crown Resorts Limited employees being held in Shanghai and had requested to meet with a third as soon as possible.
All of the six Paradise Company employees arrested in June of 2015 have now been released after serving jail time while a trio of Grand Korea Leisure Company’s seven jailed representatives were set free in August followed by the remaining four on Monday.