Vampiric Jew Casino Magnates sink teeth deep into China's neck

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Macau Labor Shortage Seen as Hurdle for Casino Expansion
By Vinicy Chan - May 21, 2012 6:02 PM CT


Macau's $34 billion gaming industry has an obstacle. With 28 million visitors and 21 percent economic growth last year, Macau is confronting a severe labor shortage.

The Chinese city, one of two of the country's special administrative regions along with Hong Kong, is the world's largest gambling hub by revenue and is close to full employment.

As a result, Casino operators such as Las Vegas Sands Corp. (LVS), Wynn Resorts Ltd. (WYNN) and Hong Kong-traded Galaxy Entertainment Group Ltd. (27) are having trouble finding workers as they seek to draw more of the Chinese tourists who drove gambling revenue up 42 percent last year. Rules requiring firms to hire staff from Macau's population of about half a million are driving up wages and have casino operators scrambling for card dealers, construction workers and executives.

Quote"It's a challenge everybody faces," said Edward Tracy, chief executive officer at Sands China Ltd. (1928) "You have a base population of 500,000 and an unemployment rate of 2.1 percent. That 2.1 is almost zero: those people are probably not looking for a job."

Joblessness in Macau is at the lowest since Bloomberg began tracking the data in 2002. It contrasts with the 15 percent monthly unemployment rate in Portugal, 8.1 percent in the U.S. and Spain's 24 percent.

The rules not only make it harder to hire staff, they also contribute to a rise in wages, though casino profits aren't suffering.
Surging Profits

At Sands China, for example, the Asian unit of billionaire Sheldon Adelson's Las Vegas company, profit rose sixfold in the three years through 2011. Tracy says a big worry is the 4,000 positions he'd like to fill.

In December, average earnings, excluding bonuses and allowances, of full-time employees rose by 6.5 percent in the gaming sector to 16,720 patacas ($2,090), according to government data.

The gambling industry's need for more workers, however, has hurt small businesses such as restaurants by forcing them to raise wages to compete with the casinos, said Fung Kwan, head of the economics department at the University of Macau.

"Labor shortage has been an ongoing problem for Macau," said Kwan. "The recent casino developments have exacerbated the problem and we've seen the casinos nabbing labor from other sectors. Labor cost for the whole of Macau is rising." Gaming revenue represented about 40 percent of Macau's gross domestic product last year, he said.
Baccarat Dealers

At the baccarat table in the Venetian Macau, a dealer who said she goes by the nickname of "Ah Fong" said her monthly salary of 20,000 patacas is more than double the amount she used to make as a waitress.

"Only Macau residents are permitted to work as dealers, so there's a huge demand for us," she said.

The competition for labor is set to increase. Wynn Macau Ltd. (1128), gaming magnate Steve Wynn's Hong Kong-listed unit, was given the go-ahead to build a second casino resort in Macau this month.

Galaxy Entertainment, the casino operator that more than tripled earnings last year, plans to invest $2.1 billion to double the size of its resort in three years. Adelson opened the first phase of his Sands Cotai Central casino in April and that resort will add 4,000 hotel rooms and 200 gaming tables over the next year.  <$>

"The shortage of labor will be exacerbated when the new resorts come online, particularly with respect to positions that can only be filled by Macau residents," said Grant Govertsen, a Macau-based analyst at Union Gaming Group. "This will put further upward pressure on wages."
Gambling Legally

Macau, which is 60 kilometers (37 miles) southwest of Hong Kong and half the size of New York's Manhattan, is the only place in China where gambling in casinos is legally allowed.

The city has been benefiting from a jump in economic growth and job creation since opening up its gaming industry in 2001. It has a population of a little more than half a million and a work force of 346,000.

Under government rules, some jobs, such as those of casino dealers, can only be held by local residents. Companies need to get approval from the governor before they can hire any non- resident worker, according to the norms set out by Macau's Labor Affairs Bureau.

For approval, companies must ensure that salaries of local workers won't be affected upon the employment of foreign workers and the proportion between resident and non-resident workers must be "acceptable," according to the guidelines.

Political Process

Sands China has more than 22,000 employees and 6,000 of them are from outside Macau, according to Melina Leong, the company's vice president for public relations. Sands China raised employee wages by about 6 percent last year.

One hope is the Macau government will loosen restrictions on foreign hiring to help the industry sustain growth. Macau's local labor force is not sufficient to cope with the recent projects and the city needs more outside workers, Kwan said.

"There's a political process that has to happen," said Sands China's Tracy. "My belief is, as long as we develop the next one or two projects, we'll begin to see some relaxation." Galaxy Deputy Chairman Francis Lui said in April he expected the Macau government would soon come up with "a solution."

Macau's labor department press section couldn't be reached by phone or e-mail.

Other gambling operators are also awaiting approvals for further expansion. MGM China Holdings Ltd. (2282) and SJM Holdings Ltd. (880) are awaiting approval of land leases for construction on an increasingly popular part of the city called the Cotai strip, while Melco Crown Entertainment Ltd. (MPEL), which already operates the City of Dreams casino on Cotai, waits for permission to begin the $1.9 billion Studio City resort.

For local residents such as 46-year-old "Ah Fong," who switched careers from waitressing about four years ago, the restrictions are a boon for now.

"It offers good money," she said of work in the casino. "Even my son, who is now 14, wants to become a dealer when he finishes school."

To contact the reporter on this story: Vinicy Chan in Hong Kong at flongid@bloomberg.net; Stephanie Wong at http://www.bloomberg.com/news/2012-05-2 ... nsion.html
After the Revolution of 1905, the Czar had prudently prepared for further outbreaks by transferring some $400 million in cash to the New York banks, Chase, National City, Guaranty Trust, J.P.Morgan Co., and Hanover Trust. In 1914, these same banks bought the controlling number of shares in the newly organized Federal Reserve Bank of New York, paying for the stock with the Czar\'s sequestered funds. In November 1917,  Red Guards drove a truck to the Imperial Bank and removed the Romanoff gold and jewels. The gold was later shipped directly to Kuhn, Loeb Co. in New York.-- Curse of Canaan