Inside Asian Gaming

October 2008 | INSIDE ASIAN GAMING 17 Gaming Stats I n the editorial for the September edition of Inside Asian Gaming we mentioned the tendency in modern life to rely on statistics rather than what our experience and eyes tell us. Arguably it was the reliance on statistical debt models rather than common sense lending practices that got the world into the financial pickle it’s in today. At a time of global financial crisis, when markets and individual investors are frequently acting in irrational ways,common sense is more and more at a premium. So IAG was interested in a small item in The South China Morning Post recently that stated: “Anecdotally, one recent statistic that caught my attention was job vacancies in Macau’s gaming industry. They fell 85% during the second quarter, showing crunch time has hit the once- booming gaming tables—Main Street in Macau.” Is that right? Is that what that statistic really shows? The first point worth noting is that the 85% figure refers to a year-on-year fall in vacancies (i.e., comparing in this case the figures at the end of the second quarter 2008 with the second quarter 2007). If the June 2008 figures are compared with the end of the fourth quarter 2007, the drop in vacancies amounts to 77%, though admittedly that’s still significant. Noonecanblameamediacommentator for not being a trained statistician. But if people are going to quote statistics in support of an argument, they owe it to themselves and their readers to dig a little deeper. That’s not about being a nerd, it’s just common sense. In order to conclude that the 85% year-on-year fall in vacancies in Macau in Q2 08 is the result of a drop in confidence related to the global financial crisis, one would have to do something that is almost unthinkable for the modern financial journalist stuck in an office far from the world of real people and real business. You would actually have to go out and ask employers if that was the reason. IAG realises this may seem like an almost revolutionary concept, but it’s how journalism used to be done in ‘the old days’. There is in any case another potential explanation for the 85% drop in vacancies. This is that there weren’t any new casino properties opening in the second quarter of 2008. Based on the figures compiled by DSEC—the Macau government’s Statistics and Census Service, at the end of June 2007 there were 2,525 vacancies for casino dealers in Macau, but by the end of June 2008 there were only 105. This accounts for a significant proportion of the fall in Macau job vacancies over this period. But just in case anyone has forgotten, The Venetian Macao opened in August 2007, and the MGM Grand Macau opened in December that year. International gaming companies don’t usually leave it to the last minute to recruit staff, so it’s much more likely that the June 2007 vacancy level was a ‘spike’ caused by new economic activity, rather than that the June 2008 vacancy figure is a ‘fall’ caused by a downturn in economic confidence. What gives some credence to this is a glance at other job categories. The number of vacancies for ‘technicians and associated professionals’ fell only 16% from December 2007 to June 2008, while demand for ‘directors and managers of companies’ actually rose 73% between December 07 and June 08. That doesn’t look like an indicator of a local economy in crisis. As we mention in this month’s editorial, the chances are that Macau and other Asian gaming jurisdictions will feel some effects from the liquidity crisis that started in North America and Europe. We live in a closely interconnected world and no amount of wishful thinking will change that. What is avoidable is the tendency to rely on bald statistics rather than our common sense and experience in trying to make sense of what’s going on. We owe at least that to the industry on which we’re commentating. Job Vacancies in the Gaming Industry by Ocupation End of Jun. 2007 Dec. 2007 Jun. 2008 5112 3411 764 38 19 33 9 11 10 192 118 99 3602 1872 360 674 771 161 2525 914 105 808 994 196 748 794 186 2 - - 46 109 38 - - 3 415 288 25 Occupation Total Directors and managers of companies Professionals Technicians and associate professionals Clerks Of which: Hard nad soft count clerks, cage cashiers, pit bosses, casino floorpersons, etc. Services and sales workers Of which: Casino and slot machine attendants/hosts, security and surveillance workers, etc. Skilled agricultural and fishery workers Plant and machine operators, drivers and assemblers Unskilled workers Source: DSEC