The case against the 18 employees of Crown Resorts Limited detained over the weekend just got worse as Chinese police have reportedly obtained communications that document the movement of millions of dollars offshore by mainland high-rollers.

According to a report from The Sydney Morning Herald newspaper, the sensitive information was contained in the computers, laptops and mobile telephones of the arrested and included provisions and repayments of credit with Crown Resorts Limited.

The employees of the Melbourne-based firm were arrested by police in Shanghai 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”. The Chinese government has long been trying to curtail its nationals from engaging in overseas gambling by terminating the personal and financial links between foreign casino operators and their mainland clients. Led by President Xi Jinping, officials 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.

“They’ll certainly have a local database of players that they service in China,” an unidentified former senior employee of Crown Resorts Limited that had been tasked with attracting Chinese customers to Australia told The Sydney Morning Herald. “Player names, details, contact, wife, kids, birthday, how big they play, what their average daily theoretical is, how often they visited, what [VIP] programs they’re on. How often they visit, how often they lose each trip, the local [staff] will have those details.”

Those arrested included Jason O’Connor, VIP International Executive General Manager for Crown Resorts Limited, while the newspaper cited family members present at the time of the late-night action as reporting that the police had arrived with detailed knowledge of their lives. It detailed how one husband, who is a foreign national of Chinese ethnicity, declared that police had expressed surprise at his presence while questioning his wife as they believed he had been scheduled to travel for work.

The newspaper reported that there are two main ways for Chinese players to access funds in Australia with the amounts potentially reaching tens of millions of dollars at a time. One is to deposit money in illicit “underground banks” that proliferate through China as a bypass of the nation’s tight capital controls while another involves competitors directly consigning cash into their accounts via the casinos. It detailed that this second route is especially popular with wealthy visitors such as those from Hong Kong or Macau that have funds out of the reach of Beijing.

The Sydney Morning Herald reported that individuals in mainland China are limited to transferring the equivalent of $50,000 offshore a year through official channels while Crown Resorts Limited’s best clients are often provided with revolving lines of credit with no questions asked with accounts settled later depending on how much the customer wins or loses.

“Even if they offer credit and there’s sufficient evidence on the company e-mail that they entice the players with credit, that’s also illegal,” a second unidentified source told The Sydney Morning Herald.

The Bloomberg news service earlier reported that Chinese authorities had warned Crown Resorts Limited as early as last year to halt its efforts at attracting high rollers from the mainland to gamble overseas. While the Australian company subsequently shifted its marketing activities to focus more on its resorts and entertainment offerings, authorities did not perceive this as amounting to a material change.

The Sydney Morning Herald reported that the sales and marketing staff at Crown Resorts Limited in China are heavily incentivized through commissions to land clients at the baccarat tables. It cited Deutsche Bank as detailing that the company’s VIP offerings represent 25% of the casino firm’s overall revenues with China accounting for 70% of this figure. It quoted Credit Suisse as estimating that 30% of the VIP Chinese revenues come from direct marketing carried out by those detained, who have yet to be charged, while the remainder is from junket operators.

“Once an agent is caught, their contacts of Chinese customers, records of communication and the underground money transfer routes become exposed,” a Chinese intermediary who has organized junkets to South Korea told The Sydney Morning Herald.

Leave a Reply

Your email address will not be published.