REPORT: China warned Crown about recruiting high rollers last year

Gaming in Macau. Aaron Tam/AFP/Getty Images

Chinese authorities issued a warning to James Packer’s Crown Resorts and other gambling companies in 2015 about efforts to recruit wealthy clients from the mainland, according to a report from Bloomberg.

Eighteen Crown staff, including the company’s vice president of VIP International, Jason O’Connor, were detained in a co-ordinated swoop in a number of Chinese cities at the weekend.

Citing an anonymous source familiar with the investigation, Bloomberg said Crown was among a number of gambling companies warned about their marketing activities in China. Beijing has been cracking down on gambling in an austerity drive which also helps to stem capital outflows from the mainland.

The warning came after Chinese police arrested 13 South Korean casino managers suspected of luring people from China to gamble in South Korea.

Bloomberg reports:

Police had been investigating Crown for several months as part of an operation targeting gambling-related activities dubbed “Duanlian” — or “to break the chain” — with the goal of terminating personal and financial links between foreign casino operators and Chinese clients, according to the person familiar with the case. The probe is focusing on whether the company enticed Chinese nationals to gamble in Australia, as well as if it used an illegal settlement network or other underground banking services to transfer money out of the country, the person said.

The full report is here. Business Insider has contacted Crown for comment.

High rollers are hugely important customers for companies like Crown, which often offer extravagant hospitality packages including transport and luxury accommodation in exchange for the patronage of wealth gamblers. James Packer’s spectacular Barangaroo casino development in Sydney is largely targeted at the Asian high roller market.

Crown’s shares dived more than 11% on Monday but recovered some of those losses in trade on Tuesday, rising 1.7%.

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