It is reported that croupiers at Macau’s Grand Emperor casino went on strike briefly over the weekend and won an annual bonus twice as large as management had offered.
“We believe the dealers struck for about one hour on Friday and another hour on Saturday,” said investment analysts Union Gaming Research Macau. “They were threatening to strike again when a deal was reached.”
The new agreement with the casino, which is independently owned and operated as a sub-licensee of SJM Holdings, calls for a bonus equal to two months’ salary. Management previously had offered one month, according to UGRM.
Annual bonuses are customary in the local gaming industry and are calculated in terms of a lump sum rather than as a percentage of annual pay as in the US.
It’s not known what the impact of the job action will be, but UGRM suggests it “could result in a growing chorus for higher wages and bonuses throughout the industry”. Sands China, for one, announced today that it would pay bonuses in early February to all full-time employees. UGRM, however, discounted rumors that something bigger might be brewing.
“We have heard chatter on the ground with dealers agitating for a market-wide solidarity strike during Chinese New Year. We do not believe this will occur—in fact this type of chatter is often heard and yet never materializes. Further, we believe that the strike at Emperor Palace was more atypical than most people probably realize given that this property has several unique employment clauses and concepts that are not in place at other properties and give rise to frustration on the part of Emperor’s employees.”
Macau’s dealers are in a position to exercise considerable leverage with the six casino concessions when it comes to pay and working conditions. Not only is the market the largest in the world and immensely profitable but labor is in critically short supply citywide—total unemployment runs at under 2%—and government policy prohibits the concessions from employing foreign labor on the games.
New research by Morgan Stanley estimates that the six megaresorts coming to Cotai in the next three to four years will require more than 30,000 new dealers and hotel staff which the available labor pool will not be able to fill. The firm forecasts the deficit will amount to more than 13,000 workers.
“There could be a sustained period of labor-related issues,” Union Gaming says. “This is likely to put upward pressure on wages, which should largely go unseen on the P&Ls of the resorts, but could be problematic for [small and medium-sized businesses] who are competing for these same employees and don’t have the wiggle room for what could be a materially higher cost of labor.”
