* Crown's head of VIP gambling among 18 held in China
* China says detains Australians for suspected gambling
* Detentions linked to ban on casino advertising - analyst
* Crown shares close down 14 pct, other gambling shares hit
(Adds plans by Australia consulate to meet detainees)
By Byron Kaye and Farah Master
SYDNEY/HONG KONG, Oct 17 Australian casino giant
Crown Resorts Ltd said on Monday China had detained 18
of its employees including three Australians, sending gaming
stocks tumbling on concerns about their strategy for luring
The Sydney-listed company, 53 percent-owned by billionaire
James Packer, said it had not made contact with its employees,
including Australia-based head of international VIP gambling
Jason O'Connor, and was not aware why they had been detained.
Australia consular officials in Shanghai were making
arrangements to visit the Australians to offer assistance, the
Australian Department of Foreign Affairs and Trade said, without
specifying when the meetings would take place. It said support
and information was also being provided to the families of the
employees in Australia.
China's Foreign Ministry told Reuters in a statement that it
detained some Australian nationals for suspected "gambling
crimes" without further explanation. It said it was still
investigating the matter.
Crown shares fell 14 percent, their biggest one-day decline,
while smaller Australian rival Star Entertainment Group Ltd
dropped as much as 6 percent, amid concerns about the
impact the move would have on the companies' ability to attract
wealthy Chinese gamblers to major new developments in Australia.
Vitaly Umansky, an analyst at Bernstein in Hong Kong, said
the detentions appeared to be a repeat of China's crackdown on
South Korean casino marketing efforts a year earlier, a move
seen less as an attempt to curb Chinese gambling than to keep it
under domestic control.
"The Chinese government seems to be making a clear statement
about its view on gaming activity being offshored to foreign
jurisdictions, while Macau is not being targeted in the same
way," said Umansky.
Thirteen South Korean casino managers were arrested in China
last year for offering Chinese gamblers free tours, free hotels
and sexual services.
Melbourne-based Crown holds a 27 percent stake in Melco
Crown Entertainment Ltd based in the Chinese territory
of Macau. It does not directly run casinos in China but relies
heavily on Chinese gamblers at its Australian operations.
Shares in other non-Chinese Macau gambling companies also
fell, including Melco Crown, down as much as 5.6 percent, Wynn
Macau Ltd and Sands China.
"GOT IT WRONG"
Although it remained unclear what prompted the mass
detention, analysts said the move suggested Crown had misread
the enforcement climate about marketing its venues on the
mainland, where gambling is illegal except for regulated
Most other operators have toned down their marketing in
China over the past two years, focusing on their live shows,
restaurants and accommodation.
"Crown apparently either thought nothing to worry about, or
they have only recently revived operations in (China). Whatever,
they got it wrong," said David Green, an analyst at Newpage
Consulting, which focuses on the gambling industry in Asia.
The detention may affect Crown's operations in its home
country, too. Crown is planning a A$2 billion ($1.5 billion)
gaming resort on the Sydney waterfront, targeted largely at
"It's getting harder and harder to see how you continue to
do business in that space when regulatory increases are clearly
the highest risk factor," said Evan Lucas, a strategist at IG
The Crown staff were held following raids in Shanghai,
Beijing, Guangzhou and Chengdu, the Australian Financial Review
reported at the weekend. Crown did not comment on the
circumstances of the detentions.
Packer stepped down as co-chairman of Melco Crown earlier
this year, as a Chinese government corruption crackdown put the
brakes on gaming revenues in Macau.
($1 = 1.3187 Australian dollars)
(Reporting by Byron Kaye, with additional reporting by Ben
Blanchard in BEIJING and James Regan in SYDNEY; Editing by
Stephen Coates, Lincoln Feast and Ian Geoghegan)