Sep 03, 2014 Newsdesk Uncategorized  
Part of the margin story in Macau has been improving labour productivity, which has helped offset rising labour costs. Those gains in efficiency however are beginning to flatten out, suggest some analysts.
New York-based Telsey Advisory Group estimates that since 2005, Macau casino labour productivity has improved by 38 percent – being measured by head count per gaming table.
But analyst Christopher Jones added: “On the casino floor, there are limits to the ability to drive labour costs down.”
One common way is to increase volume of play and money crossing the table. That “drives up yields and leverage[s] the cost of the labour – to have dealers, pit managers and security for these tables,” he added.
The challenge in Macau however is that labour policies are different from Las Vegas, where operators can allocate their staff based on consumer demand, and thus control labour costs. That is “one of the many reasons you see fully-staffed tables in empty parts of the casino floor” in Macau, said Telsey’s analyst.
Technology could help offset labour expenses, namely the expanded use of electronic tables. These products can also allow operators to shift lower yielding play away from live tables and their higher operating overheads.
“We have seen this trend for a while, so one wonders how much more opportunity there is on this front,” said Mr Jones, adding that other solutions that might help dealers with table management are “likely years away from broad based adoption”.
With pressure mounting, the solution for Macau operators would probably be to work with labour groups “that support a more progressive labour policy in Macau,” said the analyst.
Telsey believes that allowing some level of non-resident workers into the ranks of dealers “is the best way to maintain social harmony in Macau”, while also providing a better opportunity for locals within the casinos.
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