China has confirmed it has detained some Australians for "suspected gambling crimes" after Sydney-listed casino giant Crown Resorts said 18 of its employees had been taken into custody.
The 53 per cent James Packer-owned company said the group included three Australians.
In a brief statement sent to news agency Reuters on Monday, Chinese foreign ministry officials said the case was still being investigated but gave no further details.
Crown's announcement sent gaming stocks tumbling on concerns about their strategy for luring Chinese gamblers.
The company said it had not made contact with the employees, including Australia-based head of international VIP gambling Jason O'Connor, and was not aware why they had been detained.
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," Umansky said.
Thirteen South Korean casino managers were arrested in China in 2015 for offering Chinese gamblers free tours, free hotels and sexual services.
Crown holds a 27 per cent stake in Melco Crown Entertainment 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.
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 state-sanctioned lotteries.
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 Newpage Consulting's David Green, 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 gaming resort on the Sydney waterfront, targeted largely at Chinese tourists.
"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 Markets.
The Crown staff were held following raids in Shanghai, Beijing, Guangzhou and Chengdu, the Australian Financial Review reported on the weekend.
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.
