Casino economy flourishes but experts warn of Macau imbalance

From elaborate skating shows to big-name pop concerts and haute-cuisine restaurants, Macau’s booming casinos are sparking a flood of new business into the southern Chinese territory.

But economists warn the gaming sector is flourishing at the expense of other parts of the economy as a labour crunch draws staff from public services like teaching and healthcare into high-paying casino jobs.

„There is a structural nightmare awaiting Macau in three to five years unless something is done about the labour situation,“ said Barry Brewster, director of human resources management firm Evans and Peck.

Macau is on a roll. Last year gaming revenue came to seven billion dollars, overtaking the earnings of Las Vegas‘ famous strip to become the biggest gaming attraction in the world.

The casinos‘ success has brought businesses wanting to cash in on the boom pouring into the tiny former Portuguese enclave, a largely autonomous region of China since 1999.

„We feel Macau is rapidly assuming the mantle of Las Vegas in every way, not just in gaming but also in the associated industries like entertainment,“ said Jeb Rand, of Vegas-based Rand Productions, which stages ice skating shows around the world.

„That means that family entertainment and other diversions will begin coming here as they did in Vegas 20-30 years ago,“ added Rand. „It’s a rapidly maturing market.“

Other businesses, like Philippines-based Bayview Technologies, which runs an online poker site, are here simply to get their share of the glitter.

„Our product is not available in China because online gaming is against the law but just to be associated with Macau is good for business,“ said business development manager Charles Wong.

At a rough estimate, some 25 billion dollars of investment has been committed to Macau in the past few years by casinos and hotels wanting to get a presence in the city.

The earnings have been good for the government too, which is able to pay for its two billion dollar annual budget from gaming tax receipts alone.

But the casino boom has not been good for other parts of the city’s economy.

With a workforce of just 250,000 and most forecasters projecting that the casinos will create at least another 20,000-100,000 jobs over the next 10 years, competition for staff has created a cut-throat labour market.

„Staff retention is a huge problem in Macau,“ said Brewster. „Poaching of even low-level personnel, like construction workers, is common and at the level of croupier and dealers, it’s brutal.“

Brewster cited the example of the latest mega-casino, the towering Grand Lisboa. When it opened last month, it was offering such high wages that it was able to attract some 160 dealers from a rival casino.

The knock-on effect is that infrastructure that also need staff, such as hospitals and schools, cannot compete with the casinos, which in some cases are offering triple the monthly salaries — around 2,000 dollars — of a teacher.

„There is an imbalance; people are leaving state jobs for the casinos because they pay more,“ said Albano Martins, a Macau-based economist.

The government is looking at ways to ease the problem but the most obvious solution is also, politically, one of the most problematic.

Led by gaming tycoon Stanley Ho, casino owners are calling for a relaxation of immigration laws to allow thousands of overseas workers into the city. Ho has said that at least 200,000 will be needed.

But the government has to balance those demands against concerns of the local population fearful of an influx of foreigners. In a rare display of public anger, some 6,000 people joined a protest march against such a move late last year.