Macau casino boom: Will the run last?

Labor shortages may prompt lifting of a ban on migrant workers.

Perched behind the front desk at the Pousada de Mong-Ha, a colonial-style hotel in Macau, Iris Lo looks every inch a professional hotelier in her dark bow tie, and gray tunic over a blue-striped blouse.

In a few months, that's what she could be. For now, Ms. Lo is a fourth-year student at Macau's elite Institute for Tourism Studies (ITS), where the hotel is located. Her outfit is the school's uniform. She's getting ready to graduate in a labor market so tight that most of her classmates have already lined up well-paid jobs in Macau's burgeoning hospitality sector.

Even by China's exhilarating standards, the gambling-driven economic boom in Macau, a tiny enclave ruled by Portugal for four centuries until its hand over in 1999, is something to behold. Last year gaming revenues at its 22 casinos rose to $7.2 billion, according to Macau government figures, up threefold in six years, outdistancing Las Vegas for the first time and lifting GDP growth to a red-hot 17 percent.

Gambling giants from Las Vegas are among those building new casinos and resorts in Macau, which received 22 million visitors last year. Among the newcomers is the 3,000-room Venetian Macau, a giant casino due to open this summer at a cost of $2.3 billion. International hotel chains are also opening their doors along a new casino strip built on reclaimed land, a 10-minute drive from Macau's international airport.

For young Macanese seeking a start in the hospitality industry, it should be the best of times. But Ms. Lo, a tourism-management major, isn't so sure. "I'm afraid this is only a bubble. You can easily find a job now, but what about in five years?" she asks.

50,000 croupiers wanted

By then, the burst of investment that greeted the licensing of new casinos in 2002 may face new challenges. As well as competition from Singapore and other Asian countries loosening rules on gambling, Macau is vulnerable to any political shift in Beijing, whose ban on betting elsewhere in China makes this enclave a gold mine. Over 60 percent of the visitors here are Chinese, and if they took their bets elsewhere, Macau's monoculture economy would be in trouble.

With a population of only 510,000, Macau is dependent on laborers from mainland China to build the glittering pleasure palaces. Most jobs in hotels and casinos are reserved for locals like Ms. Lo, but gambling tycoons are lobbying Macau's government to ease labor laws so they can recruit overseas, particularly for croupiers – those who run the gambling tables. By 2009, the casinos estimate they will need 50,000 croupiers. That makes hospitality students nervous, given China's huge labor supply.

Gambling has long defined Macau, the seedy cousin to neighboring Hong Kong. Not only wagers on horses and slots, but also on murky dealings with North Korea, for whom Macau served as a no-questions-asked trade hub. That role was embarrassingly made public in 2005 when the US accused Banco Delta Asia of laundering profits from North Korean sales of drugs and counterfeit bank notes.

While the British fashioned Hong Kong into a world-class financial center, Macau's colonial rulers took a more hands-off approach. Portugal was the first European country to claim territory in Asia – Macau, East Timor, Goa – and the last to leave. In between, it built churches, forts, and mansions, and left a culinary legacy that lingers in Macanese food, a tangy fusion of East and West. Visitors left cold by roulette wheels can take refuge in relaxed, family-run restaurants where hearty meals are served.

A 35-percent gambling tax

Since 2002, when Macau ended a 40-year monopoly on gambling held by Stanley Ho, a Hong Kong businessman, that slow pace has given way to a frenzied casino boom that has reshaped the territory. Some residents find it bewildering to be swamped by so many visitors and ask if the riches from the gaming industry – which pays 35 percent tax on revenues – will lead to better public services or improved standards of livings.

Still, Sophia Chan reckons that Macau is on track. A second-year student in hotel management at ITS, she plans to carve out a career in an international hotel. On a recent morning, Ms Chan, a cheerful bespectacled woman, keeps a close eye on the lunchtime rush at the cafeteria, which she is helping to manage. "I like hospitality. I think my smile can make other people smile," she says.