IAG August 2014 - page 10

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August2014
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types of people but rather about safeguarding social stability,” says
Kwan Tsui Hang, vice president of the city’s largest labor group, the
Macau Federation of TradeUnions, and amember of the Legislative
Assembly. “It is about providingopportunities toMacau residents—
particularly the middle-aged and the low-skilled—to obtain a more
stable andhigher-paying job.”
Toaccomplish this it isall but certain thegovernmentwill have to
stick closely to its own yearly caponnew table games.
“We do not rule out that the [new Cotai] projects can get all the
tables they have requested—namely 500-700 tables each—10 years
later,”Secretary for Economy andFinanceFrancisTamhas said. “But
for the 10 years starting 2013we are certain that the government will
not grant all the tables each project has requested … based on the
annual rateof increaseof nomore than 3%.”
Between 2006 and 2009, 75,691 new local and non-local
employees—an average of 18,923 a year—were sufficient to support
at least 15newcasinohotels that openedduring theperiod, including
The Venetian Macao, City of Dreams, Wynn Macau, MGMMacau
and Grand Lisboa. The number of dealers shot up by 14,688 over
the sameperiod to serve the additional 3,382gaming tables, with4.3
dealersmanning each table, versusMorganStanley’s assumptionof
sevendealers per table.
Should the cap be strictly adhered to there will only be 1,646
incremental new tables allocated to the new projects, Credit Suisse
analystsKennethFong and IsisWong estimated in their latest report
onMacaugaming.
“If the government approves all the table requests and projects
open at the same time, this would create a huge pressure on wage
costsand local SMEs, andpotentially causesocial discontent. This is
what theMacaugovernment doesn’t want to see,” they said.
David Chow, co-chairman and chief executive of resort operator
Macau Legend Development and a former legislator, believes the
government has the situationunder control.
“The pace of gaming development can be controlled by the
government, not by the gaming companies,” he says. “If all the
projects open at the same time, I really don’t know how they can
operate. But if the openings can be staggered intodifferent phases I
don’t think it will be that difficult.”
Macau Legend owns the Pharaoh’s Palace, which is located in
the company’s LandmarkMacau Hotel, and a second SJM satellite
casino, the Babylon, located at the company’s Macau Fisherman’s
Wharf outdoor leisure complex near the city’s main ferry terminal.
Fisherman’s Wharf is in the midst of an expansion and makeover
slated for completion in2017.MrChow ishoping toget anadditional
350 gaming tables at the complex, and he will need 5,000 more
workers.
HELPFORTHEAGING
In viewof the government’s current reluctance tomake any changes
to its labor policy, casinos are seeking other solutions. Technology
couldbe abigpart of the answer.
At theMacau Jockey Club Casino, which reopened on 30th April
after a decade of closure, chipless e-baccarat tables supplied by
gamingequipmentmanufacturerParadiseEntertainmenthavepaved
the way for the hiring of older, lower-skilled dealers who previously
werenot considered suitable by casinos.
“Thedigital interfacespeedsup thegame,withautomaticpayouts
doing away with the need for dealers to do mental calculations.
Calculating the 5% commission on banker wins was quite difficult
for some of them,” says Jay Chun, chairman andmanaging director
of Paradise Entertainment. “[The e-baccarat table] provides a new
solution to thedealer shortageMacauwill face in the coming years.”
Mr Chun calculates that by using e-baccarat tables and the
chipless system, the Macau Jockey Club Casino has reduced its
staffing requirement by two-thirds.
Morgan Stanley says deploying more electronic gaming tables
and improvingproductivity couldhelp ease the city’s labor shortage,
but warns: “ETGs are generally less appealing to gamblers, resulting
in lower yieldper totalmachinescombined thananequivalent table.”
For the University of Macau’s Davis Fong, part of the solution
hinges on adapting to certain demographic realities. “The question
rightnow iswhethercasinoswillbewilling toput forward lessyouthful
faces to their customers on their front lines,” he says, adding that
“more thana few”middle-aged residentswouldbewilling toworkas
dealers if casinoswelcomed them.
“Thepaceofgamingdevelopment
canbe controlledby thegovernment,
notby thegaming companies.”
DavidChow
co-chairmanandCEO,MacauLegendDevelopment
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