Layoffs “not appropriate” as high gaming revenue reported

Tuesday, May 26, 2009
Issue 713, Page 3
Word count: 556
Published in: Macau Daily Times

Poyi (Natalie) Leung

Local gaming operators should pursue corporate social responsibility and not to layoff employees by taking advantage of the global financial crisis, a gaming management professor said yesterday.

According to director of the Institute for the Study of Commercial Gaming at the University of Macau, Dr. Davis Fong Ka Chio, in the first four months of this year Macau’s monthly gaming revenue amounted to around 8.7 billion patacas, which he said was “much better than expected”.

In addition, Dr. Fong said the gaming companies’ cash flow in 2008 “was sufficient to support the entire industry to operate and at the same time to make profits.

“I think the gaming companies should show more corporate social responsibility and not to cut employees’ salaries or lay off staff,” he said on the sidelines of the launching of the “Blue Book of Macao” at the UM.

Dr. Fong also said that the global economic downturn only had “limited impact” on Macau’s gaming industry.

“The local gaming industry is still in the development process rather than already saturated. The market will still grow in the next two or three years and so do the gaming revenue and direct gaming tax,” he added.

As the government statistics only showed the situation of the overall gaming industry, Dr. Fong said that if any individual operator had internal financial issues, it should disclose and explain its difficulties to the public in an open manner.

Asked what direction the local gaming industry should be looking at in the future, Dr. Fong pointed out that the hotel sector would have a lot of potential to attract visitors to Macau.

“In the past three years, the hotel industry had registered a 20 to 30 percent added value, which posed a significant impact to GDP,” he said.

“By selling five-star hotels yet priced at a four-star room rate, Macau is able to compete with the neighbouring regions. In any case, tourists who stay here will spend, either on gaming or non-gaming area,” he added.

Moreover, Dr. Fong said as most positions in hotels did not require extensive education background, it would meet “the characteristics of Macau people and may also absorb excessive human resources being released by casinos during bad economic environment”.

Dr. Fong said that the gaming operators chamber had consolidated the direction for the industry’s development.

However, he highlighted that the most important thing was not to have another “war of words” because of different viewpoints and origins among the six gaming operators.

“I can’t yet see any space for a reduction of direct gaming tax. But as the gaming revenue is expected to continue to increase in the next couple of years, the companies will still be able to make a profit even if the tax rate remains unchanged,” he said.

The current direct gaming tax in Macau stands at 35 percent of the gross income.

On the other hand, the University of Macau (UM) yesterday launched the first edition of the “Blue Book of Macao” which is an 2008-2009 annual report on Macau’s economy and society.

Edited by dean of the UM Faculty of Social Sciences and Humanities, Hao Yufan, and Macao Foundation member Dr. Wu Zhiliang, the publication gathered Macau’s academic elites to write 37 research reports in the areas of economy, social affairs, culture, politics and foreign relations.

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