GGRAsia – China cracks down on Korean casino marketing officers

China cracks down on Korean casino marketing officers

Oct 15, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Mainland China police have arrested 13 South Korean casino managers and several Chinese agents suspected of luring Chinese citizens to South Korean casinos, Reuters news agency reported, quoting China’s state television.

The mainland’s Ministry of Public Security had reportedly started in June an operation called “Chain Break” – said to be aimed at disrupting foreign casinos’ access to money flows from China. The operation also reportedly targeted the links of those casinos to individuals that scout for gamblers in mainland China.

In a report late on Tuesday, Chinese state television said police was probing “criminal gangs” who “enticed” Chinese to South Korean casinos with free tours, free hotels and sexual services, Reuters reported.

Casinos are not allowed to legally advertise in mainland China, but operators often promote the resorts where the casinos are located. Agents that refer gamblers to these casinos typically make commissions based on a percentage of house win or percentage of amount wagered.

A South Korean tourism ministry official said the 13 Koreans are employees of South Korea-based casino operators Grand Korea Leisure Co Ltd and Paradise Co Ltd. The official added that it was unclear if they had been charged, Reuters reported on Wednesday.

A spokesman for Paradise Co told Reuters that no company representatives were involved in providing the services described in the media report, but confirmed that six of the 13 detained Koreans were its employees.

Chinese media reported in June that Beijing police had arrested 14 South Korean direct marketers in mainland China for allegedly promoting casinos to Chinese citizens.

In February, Hua Jingfeng, a deputy director at China’s Ministry of Public Security, had announced a crackdown on casino operators from neighbouring countries that had set up offices in China “to attract and recruit Chinese citizens” to gamble abroad.

Brokerage Sanford C. Bernstein Ltd mentioned in a note in August that it believed “the Chinese government’s crackdown also targets tour agencies that help gamblers apply for foreign visas”.

“Overall, 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,” analysts Vitaly Umansky, Simon Zhang and Bo Wen wrote in August’s note.