China files criminal charges against 3 Australian Crown gambling employees

Beijing,Nov22:Chinese authorities are pursuing criminal charges against at least three employees of Australian gambling concern Crown Resorts Ltd., including a top executive who oversaw efforts to attract wealthy international high-rollers to its casinos.

The Australian Department of Foreign Affairs and Trade on Tuesday issued a brief statement saying it had been “formally notified of the arrest of three Australian Crown employees on suspicion of gambling offenses.”

The ministry said the three Australians—among 18 people initially detained last month—remained in custody in Shanghai and would be visited by Australian consular officials Tuesday. One of the Australians detained was Jason O’Connor, vice president of International VIP operations.

 Crown Resorts officials declined to comment. Chinese authorities couldn’t be reached for comment.

The Crown employees were taken into custody by authorities in raids that began near midnight on Oct. 13 in cities including Shanghai, Beijing, Guangzhou and Shenyang, according to a person familiar with the matter.

In addition to the Australian citizens, the 15 others detained included Chinese nationals and one Malaysian. One of the Chinese detainees was subsequently released on bail. The status of the others taken into custody couldn’t immediately be determined.

Under local law, Chinese authorities have 37 days from the time of detentions to charge detainees. That deadline passed this weekend.

The Malaysian consulate in Shanghai hadn’t been notified about the status of the Malaysian detainee, a consulate official said.

While the specific charges under investigation were not clear Tuesday, the action against the Crown employees appears to be the latest in a series of Chinese crackdowns on gambling, which is illegal in China except for the special administrative region of Macau. The anti-gambling initiatives have been linked to Chinese President Xi Jinping’s broader campaign against corrupt party officials. A number of officials have been accused of squandering state funds at gaming tables or using gambling to spirit money out of the country, which defy China’s restrictions on capital outflows.

Casinos, however, have become increasingly dependent on Chinese high-rollers, devoting significant resources to attract their business—even offering private-jet services in some cases.

Under Chinese law, casinos aren’t allowed to promote gambling in China, and organizing a group of more than 10 Chinese nationals to go to casinos overseas is also a crime.

Overseas casino operators sidestep that ban by marketing only their hotels and entertainment in public promotions.

Melbourne-based Crown, part-owned by Australian billionaire James Packer, has benefited from an upsurge in Chinese tourists at its Australian casinos even as the clampdown on graft by the Chinese government hurt its operations in the gambling enclave of Macau.

Since the detainments, Australian government officials have raised concerns with Beijing but stopped short of criticizing the detainments. In a regularly scheduled visit to Beijing last month, Australian Justice Minister Michael Keenan told reporters that he raised the issue of Crown during talks but didn’t disclose details.

The detainments were foreshadowed last year in comments made by Hua Jingfeng, deputy chief of China’s Ministry of Public Security.

 Mr. Hua told reporters that his department was investigating a “series of cases” involving foreign casinos in China. “Overseas, a few countries are treating our country as a big marketplace,” Mr. Hua said, adding that he was aware overseas operators were establishing offices in China with the goal of luring citizens abroad to gamble.

Eight months later, Chinese authorities arrested more than a dozen South Korean casino managers and a number of local agents for the practice.

“The real message from all of this is if you are operating in China, you must operate absolutely according to the law as you would in any place, even though the environment sometimes feels like it’s a bit loose,” Geoff Raby, Australia’s former ambassador to China who now runs an advisory firm in Beijing, said at a conference in Sydney this month.

Mr. Raby was ambassador when mining executive and Australian national Stern Hu was charged with bribery in 2010 and detained in China.