Inside Asian Gaming

acau is facing a significant labour crisis through its casino-led boom. The la- bour pressure is being felt not only in the ca- sino industry (i.e., casino staff) but also in the construction industry. This has recently driv- en numerous casino operators to report cost blow-outs as they complete the construction of their casinos. For instance, Las Vegas Sands Corp (LVS) recently noted that the cost of construct- ing its properties on Cotai anchored by the soon-to-open US$2.4 billion Venetian Ma- cao, would increase by 40% to US$12 bil- lion. Similarly, Melco-PBL recently stated that construction costs for Crown Macau came in US$71 million above budget, while the mar- ket is awaiting a further update on cost over- runs at the City of Dreams project. Similarly, the pressure is being felt with regard to casino labour staff (particularly croupiers). Over the last 12–18 months, the raft of new casinos opening has increased the demand for experienced croupiers signif- icantly.The limited labour force,coupled with the restrictions placed by the Macau govern- ment on hiring non-residents, has driven the average wage cost of casino staff 26% higher in 2006 alone. Expected crunch The pressure on labour costs is not sur- prising given the demographics of Macau and its labour force. To gain some under- standing, Macau has a population of 520,000 with unemployment running at a historical low of 3.2% in the first quarter of 2007, when Macau Development Bottlenecks Macau’s coming mega resorts will change the city’s gaming and tourism landscape, but in addition to worrying about potential overcapacity, investors also fear growth will be held back by several bottlenecks. Macquarie Securities Conglomerates and Gaming analyst Gary Pinge addresses the three major bottlenecks—labour, China’s infrastructure and Macau’s infrastructure Labour demand M 12