Crown shares plunge after China detains high-roller chief

Anti-corruption crackdown has affected business across the casino sector

China has confirmed it has detained some Australians for "suspected gambling crimes" after Sydney-listed casino giant Crown Resorts said 18 of its employees had been taken into custody.

The Australian Financial Review said the 18 executives were detained in a series of raids across four Chinese cities on Thursday night and Friday morning. "At this time we can provide no further details".

It is unclear why the staff may have been detained or if any charges have been laid. Hua Jingfeng, a deputy director at China's Ministry of Public Security, said it would focus on casino operators from neighbouring countries that had set up offices on the mainland.

But industry sources say the practice comes at great risk given public warnings from Chinese police, and the arrest of South Korean casino employees in China a year ago. The employees are believed to remain in detention, almost 18 months after their initial arrest.

Crown Resorts has not been able to speak to any of the employees and has indicated it is working closely with the DFAT to urgently make contact and ascertain the welfare of its staff.

"Chinese authorities have three days in which to notify of the detention of Australians according to the terms of a bilateral consular treaty", a spokesperson said, indicating that it should have official notification later Monday.

Multiple Australian media outlets reported that - were those detained to be accused and found guilty of soliciting Chinese high rollers to gamble in overseas casinos - they could each face a jail sentence of up to 10 years. Hong Kong and Macau, considered "special administrative regions", do allow some forms of gambling and the major casino groups have operations in those cities.

Investors also fear that a tougher approach to gambling by China might inhibit the flow of VIP Chinese gamblers visiting casinos in Australia. Shares of Crown Resorts, the Australian casino company controlled by billionaire James Packer, plunged in Sydney by the most since December 2007.

An influx of Chinese high-rollers appears to have buoyed Crown's operations in Australia.

Mr Lucas said expansion in Asia was a big part of Crown's strategy and a crackdown on gambling in Macau could inhibit that strategy. Other stocks like Melco Crown, Wynn Macau Ltd, and Sands China also fell.

Under the consular agreement between Australia and China, Beijing has 72 hours to inform Canberra if they are holding one of its nationals in custody. If the Crown execs were in China on a marketing exercise, they could well have fallen foul of the mainland's strict laws on promoting gambling overseas.

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