Across the other side of the country, in the north-eastern city of Shenyang, the news filtering through was that two of his employees had been tracked down at the high-speed rail station and taken away by police. But O'Connor would not have been aware of the scale of the crisis about to envelop his company.

Later that night, around midnight last Thursday, Yang (not his real name) was startled by urgent knocking on the door of his high-rise apartment in Shanghai.

The voices on the other side pleaded to be let in. They lived directly downstairs, they said, and a massive water leak was flooding their home. With his wife, a Crown employee, still curled up in bed, he went to open the door.

As he turned the handle, seven plain-clothed police officers burst through the door, flashing badges, nudging him roughly aside. Another uniformed officer followed, documenting everything on his video camera.

"They pushed me in like they were catching a murderer or a drug [smuggler]," said Yang, who wanted him and his wife, a Chinese national, to remain unnamed.

Co-ordinated raids 

Jeff Sikkema with wife Jiang Ling. Photo: Jesse Marlow

At almost exactly the same time, Jiang Ling, a Shanghai-based administrative assistant for Crown, was settling down in her apartment near the city's bustling Baoshan port to watch classic Hong Kong movie God of Gamblers, starring Chow Yun-Fat. Five plain-clothed police and one uniformed officer turned up at her door.

"I kept saying … 'Why are you here?'. They kept repeating 'Oh, your wife knows' and she didn't obviously … they finally said 'gambling'," Jiang's husband, American expatriate Jeff Sikkema told Fairfax Media.

"She does admin stuff, there's absolutely nothing illegal about what she's done … she expedites visas."

Coordinated, almost simultaneous late-night raids were unfolding across Shanghai and other major Chinese cities, including in Beijing, Guangzhou and Chengdu.

Another Crown staffer, Shanghai-based Tao Lin, was on an overnight flight, returning from a visit to Melbourne. She was detained by authorities at Pudong Airport on Friday morning, oblivious to the events while she was in the air.

All told, 18 Crown employees were detained across China for gambling offences, and all have since been transferred to detention centres in Shanghai. They include three Australians: O'Connor, Jerry Xuan and Pan Dan. None have yet been charged.

Sophisticated operation 

Crown executives Jason O'Conner, Pan Dan and Jerry Xuan are being held in Shanghai Detention Centre on gambling-related charges. Photo: Dave Tacon

The sophistication of the police operation targeting Crown suggests authorities have had Crown's activities in China under surveillance for as long as a year, and could have included monitoring telephone communications, sources said.

Police seized documents, computers, laptops and mobile phones containing extensive and tightly guarded details on their top Chinese high-rollers. Among the most sensitive information contained in the devices are communications on the provision and repayment of credit with Crown, Fairfax Media revealed on Wednesday.

The initial carnage of the arrests has given way to a different sort of damage – the $1.6 billion implosion in Crown Resorts share market value. By Thursday afternoon its founder and largest shareholder, James Packer's wallet had taken an $800 million hit.

Crown's second-largest shareholder, Perpetual Investments, has begun ditching its shareholding and others have joined the bandwagon as big question marks arise over the future of Crown's profits in the absence of the growth rocket Chinese customers had promised to be.

There are now concerns that a this wave of havoc will hit the company's plans to invest billions of capital into Australia's casino, hotel and property markets – most of which rely on an influx of Chinese VIP punters.

Barangaroo bust? 

Crown Resorts has bet the house on high rollers.

In particular, any large scale black-balling of Crown casinos by Chinese punters casts a shadow over the economics of Packer's dream Sydney casino project at Barangaroo, for which the NSW government approval was gained on the basis that it would harvest funds from Chinese high-rollers, and not the domestic mass market.

In an attempt to hose down the magnitude of the damage, Crown told the media on Thursday that these VIP gamblers from China generate less than 12 per cent of total revenue. But the board, who sat before shareholders at the Crown's annual meeting, didn't provide much clarity or comfort. The potential for financial damage that is clearly unnerving the market was premature and speculative, Crown chairman Robert Rankin told the meeting.

Late on Friday Rankin released a statement again addressing the issue saying the project was "extremely important" for Crown and that it was "fully committed to the project.

"The rise of the Asian middle class is the backbone of Australia's tourism industry and the feedback from tourism operators is extremely positive at present, especially for Sydney. It's these tourism numbers and the changing demographics of the region that help underpin our Sydney plans and our future investment decisions," he said.

This week's revelations add to the already damaging repercussions for Crown's aggressive pursuit of high-net-worth Chinese VIPs who demand top-level anonymity, in a broader political environment where Chinese authorities are clamping down on illicit money flows out of China.

All international casinos received a clear warning in February last year that the illegal marketing of their casino businesses to Chinese nationals would be subject to heightened regulatory scrutiny.

"Some foreign countries see our nation as an enormous market, and we have investigated a series of cases," Hua Jingfeng, a deputy director at the Ministry of Public Security said at the time.

"A fair number of neighbouring countries have casinos, and they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This will also be an area that we will crack down on."

Korean crackdown 

Major shareholder James Packer said he was 'deeply concerned' about the detentions of Crown staff. Photo: Justin Chin

Two South Korean casino operators were singled out last year and became the first whose staff were arrested, having their marketing misdeeds paraded before the industry as an example of the consequences of ignoring the seriousness of the Chinese government's determination to crackdown on gambling and the money laundering it enables.

It raise serious questions over the risks to which its China-based staff may have taken if they were pushed to operate on the fringes of what is legal in the country in order to lure lucrative high-rollers.

There remains two schools of thought on the Crown arrests – the first is that the company had been far too aggressive in marketing its Australian casinos to Chinese nationals.

The second theory, which is gaining strength, is that Crown was targeted as it was attempting to collect gambling debts owed to it by Chinese high rollers.

"Normally what they do on a marketing trip is apart from meeting up with players, they're just wining and dining the players at the same time if there's money outstanding they would ask their customers to repay their debt," one industry insider told Fairfax Media.

"Usually as part of their job they help them with the movement of funds, yes."

Junket operators 

Melco Crown's Studio City casino in Macau. Photo: Bloomberg

Much of the business of facilitating Chinese gambling is undertaken by junket operators. Over the past couple of years there has been a serious consolidation of these junket companies – such that there are now only three who dominate the industry.

They typically arrange everything from private jets, accommodation and entertainment, some of which is adult in nature. But crucially they arrange credit facilities and, even more importantly, debt collection when the high rollers lose at the tables.

Industry insiders have told Fairfax that these increasingly powerful junket operators have been taking a bigger margin from the casino companies.

Crown has responded by moving towards a more direct relationship with Chinese VIPs – cutting out junket facilitators.

Cutting out this middleman has risks – and the 18 Crown staff behind bars could now pay the price.