The Chinese government appears to be looking for a showdown with Australian billionaire James Packer. His gaming empire, Crown Resorts, is reeling in response to the massive raids on its Chinese operations and the detention of 18 staff.
The longer term business and public relations ramifications are still unclear as is any effect the raids may have on the economics of Packer's Sydney Barangaroo casino project which aims squarely at capturing the Chinese VIP gaming market.
More News Videos
- Video duration
- 00:31
Australian Crown staff detained in China
- Video duration
- 00:43
Tyson Gay's teen daughter killed
- Video duration
- 00:39
Typhoon Sarika lashes Philippines
- Video duration
- 00:54
US warship targeted in failed missile attack
- Video duration
- 02:28
Trump says election is 'rigged'
- Video duration
- 01:12
The declining fortunes of Islamic State
- Video duration
- 01:06
Rhino stuck in tyre rescued in Zimbabwe
- Video duration
- 01:35
Kerry, Johnson call for Aleppo 'slaughter' to end
Australian Crown staff detained in China
Three Australians, including one senior executive, are among 18 employees to be detained. (Video courtesy ABC News 24)
It appears to be no accident that Chinese authorities undertook the highly orchestrated precision raids on all Crown International's Chinese offices when the Australian executive that ran Crown International VIP gaming, Jason O'Connor, was in town.
Sources said that O'Connor rarely travelled to China and picking the timing of his visit looks like an attempt to maximise the impact of the raids which were simultaneously undertaken across Crown's offices in all Chinese locations.
It was a cannon shot across the bow of Australian casino operators, which have been luring high-roller Chinese gamers to the growing market in the face of a crackdown by the Chinese government on casino-related corruption, particularly in Macau. Similar raids were made on the Chinese offices of South Korean gaming companies last year.
The pre-emptive strike by the Chinese government will send chills down the spines of investors in Crown and its Australian rival, The Star Entertainment Group.
But the targeting of Crown is probably no accident. Star has no offices in China and its sales staff are in other international locations.
Industry estimates suggest international VIP profit makes up between one quarter and one-third of Crown's earnings proportionately more than that of The Star.
The Barangaroo project would potentially be hit harder as its earnings will rely more heavily on the VIP markets as it won't carry slot machines.
The raids will be certain to heighten the concerns of Chinese gamblers who were looking to come out to Australia.
But the more immediate concern is the future of the 18 Crown employees, three of which are Australian, that are now said to be undergoing questioning from Chinese authorities.
They could face up to 10 years' jail.