Macau’s Casino Industry Faces Labor Shortage

The $33.5 billion gaming industry of Macau is presently facing a labor crisis which has the potential to disrupt growth in the coming years. Macau is home to prominent gaming companies such as Wynn Resorts (NASDAQ:WYNN), MGM Resorts International (NYSE:MGM) and Las Vegas Sands (NYSE:LVS).

According to data released by the Statistics and Census Service, the unemployment rate in Macau for February-April was 2.0%. ^[1] This low unemployment rate is a cause for worry for the casino operators who are vying for expansion in the region. And the present scenario has made it difficult for these gaming companies to satiate their labor demand. The labor shortage has, in turn, driven up wages in the region making it expensive for casino operators to hire and retain workers.

This situation is expected to exacerbate further with the ongoing expansion of the Macau casino industry. In the beginning of this month, Wynn Resorts received approval to start construction of its new resort on the Cotai Strip. ^[2] Similarly, LVS’ Sands Cotai Central, which opened April this year, is expected to be fully operational by 2013. All these expansion plans would be viable once the companies have access to labor to carry out their operations.

It is yet to be seen how the Macau government tackles the labor shortage problem. The government may perhaps be forced to relax  restrictions on foreign hiring to help the industry maintain its growth momentum.

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1. See: Unemployment rate for February-April was two percent, Macau Daily Times [↩]
2. See: Wynn Macau gets approval for new Casino on Cotai strip, BBC News [↩]