Inside Asian Gaming

INSIDE ASIAN GAMING | April 2009 44 Briefs Regional Briefs The Cost of Going Local The number of migrant workers in Macau fell 11.6% by the end of December from an all-time peak in September 2008. This matters to gaming investors because Macau residents are typically paid a fifth more than migrants, according to the government’s own statistics. If Macau’s gaming market is actually shrinking then of course it makes sense to reduce overheads, and the wage bill is the most obvious target. Getting rid of migrant workers may not be the most cost effective and operationally efficient way of proceeding. Although locals have been relatively insulated from layoffs, non-residents workers involved in the running and construction of gaming projects were laid of en masse in the fourth quarter of 2008. The number of non-resident workers inMacau had risen steadily from 22,929, at the end of the first quarter of 2003, to 104,281, at the end of the third quarter of 2008. The majority of new imported workers were employed in the casino, hotel and construction industries. At the end of the third quarter 2008, 23,466 non-resident workers were employed in the gaming sector, including 15,878 construction workers employed by casino operators. In one fell swoop, Las Vegas Sands Corp dismissed 9,000 non-resident construction workers in November, which, along with cuts in expensive expatriate casino managers, led to the number of non-resident workers employed in the gaming sector plunging to 10,723 in the fourth quarter of 2008, including just 4,017 construction workers employed by casinos. This finally halted the inexorable rise in the number of non-resident workers in Macau, which slid to 92,161 in the fourth quarter. It’s difficult to see, though, how casinos can square the circle of cutting costs while clinging to that part of the workforce that costs the most to maintain. Like-for-like substitution of migrants by locals seems an unlikely option as it would dramatically increase overheads. Woulda, Coulda, Shoulda LVS shares gained 18% on news that the company may resume building on its mothballed Cotai projects this calendar year. The operative word is ‘may’. We may all win seven-figure sums on the Hong Kong lottery next week, but it doesn’t mean we will. Talking up your company’s stock price and then using it as a leveraging tool with your existing creditors and potential investors isn’t a crime. But if you want to guarantee a sustained recovery of your company’s fortunes then you need to pay heed to fundamentals. And the markets are currently very focused on ‘deliverables,’ to use a popular piece of management jargon. In the presently jumpy trading conditions share prices can only make sustained recoveries if analysts and investors see hard evidence to back up the warm words. “We have to get construction back to work as quickly as possible,” StephenWeaver, President of LVS’s Asian operations told reporters at a briefing in Hong Kong. MrWeaver added Hong Kong, Macau and Singapore are still“very privileged” locations for the resort business in the long term. LVS lost 94% of its market value last year following the global credit crisis and negative news about China’s restriction on the issuing of visas for Macau to Chinese citizens. The company suspended construction projects in Las Vegas and Macau in order to concentrate on its Marina Bay Sands resort in Singapore and a casino in Bethlehem, Pennsylvania. LVS says it is on schedule to open its US$5.4 billion Singapore casino at the end of 2009 in a “fully funded” position, Mr Weaver said. Rental prices at the retail component of Marina Bay Sands, the Singapore resort now under construction, have been“pulled down to adjust to the market,” he added. Jail for Casino Scam Duo Three men have been jailed in Hong Kong for trying to blackmail a university student out of HK$650,000 after he fell for a casino scam in Macau. The court heard To Ngo-bond, aged 23, sold the use of his bank account to the swindlers for money laundering purposes and that more than HK$6 million passed through it. Mr To and a friend were at a gaming table in the Wynn Macau casino last July when a man who claimed to be a casino promoter approached them. He persuaded themto take out a clubmembership offering free ferry tickets, hotel accommodation and sauna services. Mr To was then talked into going to the nearby Casino Lisboa with the man and an accomplice. There Mr To was provided with betting chips and proceeded to rack up what he was told amounted to HK$650,000 in losses. Some time later the men visited Mr To at his Hong Kong home, where they told his mother to pay the‘debt’but she kept them talking and called the police instead. In sentencing, the judge said the scam was common in Macau and required an extensive network both there and in Hong Kong to carry out. New Casino for Sikkim The landlocked Indian mountain state of Sikkim has launched a foreigners-only casino in a bid to boost tourism. With an annual increase of 20% in tourist arrivals in recent years, Sikkim is the only state in the country offering land based live casino facilities to tourists. Goa’s gaming is currently limited to a casino ship and a small number of gaming machines in luxury hotels. The first casino was opened at the Royal Plaza hotel and was named ‘Casino Sikkim’. Naresh Subba, Chief Executive Officer of Casino Sikkim, said the State Government’s assistance had made it possible to open the casino in the state. “The Sikkim Government has trusted us and have given me the Sikkim