In a move harking back to Maoist tactics, 18 Crown Resorts staff are behind bars in mainland China for trying to please Chinese consumers. The Chinese government’s economic policy is heavily mercantilist, which means that it thinks that money has to stay inside its borders and that the economy is a competition between countries as to who can collect the most cash. That’s why they don’t take kindly to companies trying to lure cash away. In reality, stockpiling cash is not going to help anyone if that cash is not eventually spent on consumption. Mercantilism is the equivalent national policy of being buried with one’s money. The point of an economy is actually to collect goods and services with your cash in order to increase one’s standard of living, not to collect cash for the sake of bragging about some meaningless trade surplus.

But don’t expect the Chinese government to figure this out any time soon, especially when they get to go on fun power-trip missions like locking up innocent people (who may happen to be technically guilty of advertising a casino in China, they are still innocent people). These 18 staff, some major executives, are hanging out in Chinese jails now, waiting to be charged. With Crown’s annual general meeting set to kick off on October 20th in two days, it is unlikely that these people will be charged until after the meeting is over, if only just to increase the pain of the unknown for the company and its shareholders.

At the risk of sounding callous – and God willing these people will be released very soon once the Chinese authorities are legally paid off for their freedom – is this a buying opportunity now in Crown, and what does this sudden move say about the environment in China? The short answers are yes, this is a buying opportunity in Crown, and what this means for China and Macau is more interesting than what this means for Crown.

The reason this is a buying opportunity in Crown is that while Crown is reliant on Chinese VIPs, it is not that heavily reliant on them. Crown’s VIP segment accounts for 27% of the top line by normalized revenue, though probably a little bit more because 25% is wagering and nongaming activities, and it’s hard to tell how much of that 25% is also VIP contributed. Probably not all that much. 27% sounds like a sizeable chunk, but consider that VIP is down 7% since 2015 on an annual basis, but overall revenue is still up 5%. The numbers being thrown around by analysts seem to be that this sudden crackdown will dampen Crown’s VIP revenues by 5%, but they’ve already weathered bigger drawdowns without it hurting their overall revenues. They can take this hit.