Inside Asian Gaming

August 2014 inside asian gaming 7 three months to May, well below the rate considered to represent full employment, and many of the remaining 6,400 workers seeking positions are either merely between jobs or are so lacking in skills as to be virtually unemployable. That, coupled with the ban on non- locals working as dealers, has raised concerns of a severe labor shortage ahead of the second wave of resort openings on the Cotai Strip starting next year, with at least six new properties or major expansions scheduled to open between 2015 and 2017. Macau’s six gaming operators are by far the city’s biggest employers, with 83,300 resident and non-resident staff—or nearly a quarter of the employed population—including 25,250 dealers, government figures for the end of 2013 show. The vacancy rate in gaming companies stood at 3.4% over the same period compared with 10.2%, 6.2% and 11.7% in the other major segments of retail, hotels and restaurants, respectively. Although the deep-pocketed casino operators have been better able to fill vacancies than employers in other sectors, even they could struggle to meet their manpower needs as Cotai’s expansion ramps up. “In order for Macau to keep growing and provide a better life for people who live here, then this expansion of opportunity has to be coupled with enough people to deal with the visitors that come here,” said Steve Wynn, chairman of Wynn Resorts and its local subsidiary Wynn Macau, during a media briefing in May. His US$4 billion Cotai project, Wynn Palace, will require roughly 9,000 workers when it becomes operational in 2016. Mr Wynn did not go as far as calling on the Macau government to change its labor policies. A foreign operator would undoubtedly feel uneasy making such a politically sensitive demand. Rival SJM, founded by local casino mogul Stanley Ho, has no such qualms, however. “We, the industry, certainly think it best if croupier positions are open to migrant workers,” Chief Executive Ambrose So said earlier this year. SJM’s upcoming Cotai property, the $3.9 billion Lisboa Palace, will need 8,000 workers when it opens in 2017. Analysts Praveen Choudhary, Alex Poon and Thomas Allen of investment bank Morgan Stanley say the sector will need 117,000 workers following the resort openings between 2015 and 2017, an increase of 38%, or 32,000, above the current level. More than half of these, some 18,516 workers, will need to be locals, including 12,600 dealers, based on a combined 1,800 table games at the six new projects, with each table having to be manned by seven dealers. “We estimate a supply of only 700 local higher-education graduates per annum joining the gaming industry and potentially approximately 1,900 local staff that might be available to transfer internally. This implies a shortfall of approximately 13,800 local employees,” they stated in a recent client note. Upcoming Labor Shortage Each Cotai Phase 2 property would need 7K-10K new employees Source: Company data, Morgan Stanley Research estimates “We estimate a supply of only 700 local higher-education graduates per annum joining the gaming industry and potentially approximately 1,900 local staff that might be available to transfer internally,” say the analysts at Morgan Stanley. “This implies a shortfall of approximately 13,800 local employees.” Feature