Macau feels pain as casino winning streak ebbs

James Pomfret

MACAU (Reuters) - On Macau's dusty Cotai strip, the cranes at the Las Vegas Sands' construction site stand idle at dusk atop the half-finished husks of three massive towers, while weary batches of construction workers, laid-off en masse, stream out of the site's turnstiles, many for the last time.

After a golden streak since 2002, which saw Macau transformed from a sleepy former Portuguese colonial backwater into a Las Vegas-style gambling paradise, Macau's luck may be running out.

"I'm in a state of shock, the whole thing has made me sleepless for days," said Chen Rui, a native of Zhanjiang across the Chinese border, one of an army of migrant workers brought in to ease Macau's acute labor shortage amid the construction boom.

"The economy's bad in China and everything's more expensive so it's going to affect us badly. Even if we want to find another construction site it'll be very difficult," Chen, 25, added while other sacked blue-collar brethren stared at him in silence.

Last week, debt-straddled Las Vegas Sands shocked many in this brash boomtown, by laying off most of the 11,000 workers on two Cotai strip sites -- a stone's throw from the palatial 3,000-suite Venetian Macau, which Sands owner Sheldon Adelson had opened just a year ago with much fanfare.

"I never thought that was possible before, that such a big elephant could collapse so easily," said Lam Wai, manager of the San Tio watch and jewelry pawn shop, one of many operators feeding off luckless gamblers spilling from the glitzy casinos.

TOO MANY LICENSES

Others blamed the government for the casino glut, for issuing too many casino licenses and giving precious land to developers without redistributing the new found wealth.

"I'm a Macau person and all of Macau's half-million people are angry with the government," said Ng Sek Io, a laid-off worker still clutching a red helmet outside the suspended construction projects, which included five-star hotels such as the Sheraton, Shangri-La and St. Regis, as well as luxury shopping malls.

"It's a corrupt and incompetent government and it hasn't considered our current livelihood difficulties," Ng added.

Macau's gaming tycoon Stanley Ho has warned the recession could last up to three years. But even before the downturn, visa restrictions imposed by China on risk-loving Chinese punters had begun to corrode gaming revenues.

Macau has yet to see other major casino operators keel over like the Sands. Analysts say that while Adelson's bold dream of transforming the Cotai strip into a fully integrated family entertainment and conference hub rivaling Vegas' legendary strip may be delayed for several years, it is not broken.

Melco's City of Dreams casino, a joint venture by the sons of Australian tycoon Kerry Packer and Stanley Ho, is still due to open next year and the sprawling reclaimed isthmus is still the only place left in land-cramped Macau for mega-projects to rise.

"You've hit a speed bump where you've seen growth slowing, but it's not a case where everything's gone over the cliff," said David Green, gaming practice director in Macau for PricewaterhouseCoopers.

Macau is still the only place on Chinese soil where casinos are allowed to operate.