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China Sentences 16 from Australia’s Crown Resorts to Prison

Unidentified Crown Resorts employees wearing face masks are escorted by securities as they leave the Baoshan District People’s Court after attending her trial in Shanghai, China, Monday, June 26, 2017.

 

SHANGHAI  – A Chinese court sentenced 16 Australian and Chinese employees of a casino company to nine to 10 months in prison on Monday after they pleaded guilty to gambling-related charges, the company and an Australian official said.

Nineteen defendants, including three Australians from the sales and marketing team of Australia’s Crown Resorts Ltd., were convicted by the court in Shanghai. Three defendants, who had been released on bail last Nov. 11, were not fined or sentenced to prison, Crown Resorts said.

Casino gambling, the marketing of casinos and organizing overseas gambling trips involving 10 or more people are illegal in mainland China. The case against Crown Resorts’ staff came as authorities crack down on gambling as part of a wide campaign against official corruption.

Eleven defendants were sentenced to nine months’ imprisonment and five to 10 months, Crown Resorts said. Their time spent in detention since Oct. 14 will count toward their sentences.

The 16 were also fined a total of 8.62 million yuan ($1.3 million), which Crown Resorts is paying ex gratia, the company said in a statement to the Australian Securities Exchange.

“The three Australians and the other defendants pleaded guilty,” the Australian Consul General in Shanghai, Graeme Meehan, said outside the Baoshan District People’s Court.

According to Crown Resorts, the 17 current and two former employees were convicted of offenses including organizing gambling parties or being engaged in gambling as one’s main business, which carry a maximum sentence of three years in prison.

Jason O’Connor, head of Crown Resorts’ international VIP programs, was sentenced to 10 months in prison, and Australian-Chinese dual nationals Jenny Pan and Jerry Xuan received sentences of nine months, Meehan said.

The company said the court fined O’Connor 2 million yuan ($293,000), Pan 400,000 yuan ($59,000) and Xuan 200,000 yuan ($29,000). O’Connor, who is based in Melbourne, Australia, was also ordered deported.

“Crown remains respectful of the sovereign jurisdiction of the People’s Republic of China and does not intend to comment further at this time,” the company said.

Crown Resorts’ vice president in China, Malaysian Alfread Gomez, was also among the defendants. The Malaysian consulate in Shanghai didn’t respond to a request for comment.

Following the arrests in October, Crown Resorts began withdrawing from its Chinese business to concentrate on the Australian market. Last month it said it raised $987 million after it sold off the last of its stake in a decade-long joint-venture casino operator in Macau, a Chinese enclave where gambling is legal.

Casino operators across Asia have sought to lure Chinese high-rollers who have avoided Macau – the world’s biggest gambling market – because of Chinese President Xi Jinping’s ongoing corruption crackdown. At the same time, the government has been trying to stop the flow of Chinese money into foreign casinos.

In 2015, police arrested 13 South Korean casino managers and 34 Chinese agents for allegedly selling packages with free tours and free hotels. At least seven South Korean managers later received prison sentences of 13 or 14 months, according to court verdicts posted online. They were also ordered to pay fines up to 150,000 yuan ($22,000).

The industry has been known to skirt China’s ban on promoting gambling trips by touting destination packages rather than gambling, or by advertising Macau resorts as venues for events like boxing matches.

“So long as you don’t mention gambling, or credit, you’re fine, but that’s a very thin line,” said Sudhir Kale, CEO of GamePlan Consultants, who has previously done consulting work for Crown Resorts.

He said there are two ways for foreign casino operators to serve Chinese customers, who face restrictions on the amount of money they can take overseas. The first is through junkets, essentially by being middlemen who lend money and collect on debts. The second is by lending money directly to customers, a model which Crown Resorts appeared to be pursuing, said Kale, who is also a professor of marketing at Australia’s Bond University.

“I think it was the lure of cutting out the middlemen that got them a bit into trouble,” Kale said.

The Australian Department of Foreign Affairs and Trade said consular officials would continue to provide assistance to the Australians and their families until they are released.


Watt reported from Beijing. Associated Press business writer Kelvin Chan in Hong Kong and researcher Fu Ting in Shanghai contributed to this report.

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