Analysis | Gaming sector labor strains set to intensify

General Images Of Gaming In MacauWhile Macau rushes to build eight more resorts, labor strains are set to intensify, with casino workers demanding higher salaries and threatening to strike, Reuters has reported.
Las Vegas Sands and Wynn Resorts together reported labor compensation costs of USD50 million in their Macau casinos last quarter.
Casino industry analysts believe that another four operators (Galaxy Entertainment, MGM Resorts, SJM Holdings and Melco Crown Entertainment) will announce similar costs this month.
Casino dealers from both Sands and Galaxy have organized protests seeking a salary increase.
Financial services corporation Morgan Stanley indicated in a report last month that labor competition is likely to intensify, which may place pressure on margins and increase start-up losses for new resorts.
Furthermore, Morgan Stanley’s report estimated a shortfall of 13,800 local employees by 2017. They added that demand for staff is unlikely to be filled by local supply alone.
“We think the bargaining power of casino employees will keep rising in the coming few years amid labor shortages and demand of labor for Cotai phase 2 over 2015–17,”  the report said.
The job of a casino dealer, running baccarat tables for eight-hour shifts, has become increasingly popular. The salary for a dealer is more than twice that earned in the manufacturing industry, and it does not require a high level of technical expertise.
In addition to higher salaries, casino dealers are also opposed to the importation of labor to fill their positions. The policy allowing only Macau residents to take up casino dealers’ posts is unlikely to change in the near future, the government stated.
Casino operators have recently announced compensation and bonus schemes. Wynn Resorts awarded 1,000 shares to each of its 7,500 employees this year, in addition to their regular company bonus. Melco Crown revealed that it would offer management courses to employees and scholarships for their children. The Galaxy Entertainment Group announced this week that it would reward all full-time team members at the senior manager grade and below with shares equal to three times their salaries this month. CP

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