Ban Damage: Hong Kong Casinos


The World

Smoking ban from this month seen further denting revenues…

Macau dealers walk off job on Friday as labour unrest increases.

Smoking ban from this month seen further denting revenues.

HONG KONG, Oct 3 (Reuters) – Hundreds of casino workers in gambling hub Macau walked off the job on Friday to demand higher wages and better benefits, a u nion leader said, the latest in a wave of labour unrest to hit casino operators also facing shrinking revenues.

Up to 300 dealers at the flagship casino of MGM China Holdings Ltd , a unit of U.S.-based MGM Resorts International, took collective sick leave at noon on Friday, said Ieong Man Teng, head of the Forefront of Macau Gaming, the labour u nion behind recent protests.

MGM China said its operations were not affected by the strike. “The vast majority of our team members have reported to work and are delivering their high level of service as usual,” the company said in a statement.

The protest by the MGM workers comes a month after about 1,000 dealers working for SJM Holdings, the gaming company run by the family of former Macau kingpin Stanley Ho, showed up late for shifts and refused to work overtime in a protest over salaries and benefits.

Macau is the only place in China where casino gambling is legal and gaming revenues account for nearly 90 percent of government revenues.

The former Portuguese colony, home to just over 500,000 people, is racing to build eight new resorts in the next three years, but faces a shortage of labour due to rigid regulations that prohibit foreigners from working at gaming tables.

The labour strains add to the woes of the 35 casinos operating in Macau, which are face declining revenues as Beijing’s two-year-old anti-corruption drive keeps wealthy mainland Chinese gamblers away.

Analysts forecast Macau’s gambling revenues to have dropped about 13 percent year-on-year in September, their fourth consecutive month of decline. Macau’s Gaming Inspection and Coordination Bureau is expected to announce figures for the month by Friday at the earliest.

More than 60 percent of Macau’s visitors come from mainland China and October is typically a busy month for casino operators due to a week-long public holiday.

Analysts, however, said revenues for October are also expected to be weak as government restrictions on tour groups to Hong Kong, where pro-democracy protests are raging, are keep “mass market” gamblers away.

Most package tours from China visit Macau and Hong Kong together and these mass market gamblers have been a boon to casinos struggling with a drop in big-spending visitors.

“Many VIPs and premium mass players cancelled their trips, forcing casinos to comp rooms to lower-tier players,” said Karen Tang, an analyst at Deutsche Bank in Hong Kong.

She said the number of Chinese tourists visiting Macau on Oct. 1, the first day of the public holiday, was only two percent more than the previous year, a much slower growth than in the past.

Other factors likely to keep gamblers away include a smoking ban on main casino floors due to be implemented this month and restrictions by the Macau authorities on the use of China’s Union Pay card, used to withdraw cash for gambling.

Analysts forecast gaming revenues this year to grow in the low single-digits at best, which would be their weakest performance on record.

Originally written By: Farah Master

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