Single Mom Fights Billionaire’s Casinos With Macau Protests

Sep 02, 2014 4:31 am ET

(Updates with closing share prices in third paragraph under the subheadline Raises, Bonuses.)

Sept. 2 (Bloomberg) -- Cloee Chao remembers when she first decided to challenge the billionaires of the world’s largest gambling hub. The 34-year-old single mother of two was working in a Macau casino in 2012 and the second-hand smoke was so thick she started hacking up black phlegm.

“I just couldn’t stop coughing,” she said. “I was scared. If I died, what would happen to my daughters?”

Chao started a union, at first, just to get cleaner air. After her employer, Wynn Macau Ltd., and other casinos ignored them, the battle escalated. Since then, Chao has organized thousands to fight for better wages and working conditions. She has led workers into the streets seven times this year in the most widespread labor unrest yet at Macau’s casinos.

The protests threaten profits at some of the most lucrative businesses in the world. The former Portuguese colony has seen gambling revenue soar tenfold over the past decade to $45.2 billion last year, seven times the size of the Las Vegas Strip. The billionaires behind the casinos include Las Vegas Sands Corp. Chairman Sheldon Adelson, Wynn Resorts Ltd. Chairman Steve Wynn and Galaxy Entertainment Group Ltd. founder Lui Che-Woo.

Chao and her union are planning additional demonstrations, after at least 1,400 members turned out last week for the largest protest by casino workers so far this year. The clashes come as Macau has seen growth slow with a corruption crackdown in mainland China that has high rollers avoiding casinos.

Strike Threat

“We don’t rule out strikes or violent actions if the casino companies continue to ignore us and pretend nothing has happened,” Chao said at the end of last week’s protest organized by the Macau Gaming Industry Frontline Workers’ union she co-founded.

In the neighboring Chinese city of Hong Kong, thousands of protesters also took to the streets this week to demand popular nominations of chief executive candidates, with activists threatening to stage a mass occupation of Hong Kong’s financial district.

Chao is an unlikely radical. She was born in Macau and started in the casino industry as a 17-year-old waitress fresh out of high school. She worked as a dealer at casinos owned by Galaxy and SJM Holdings Ltd. before joining Wynn Macau, where she oversees two dealers in a room for VIPs.

She said she’s helping to organize the protests for workers and for her daughters, who are 9 and 13. Chao, divorced two years ago, brought her older daughter to last week’s march so she could see what her mother is fighting for.

“My children will probably follow my path to be casino workers if they want to live in Macau,” said Chao. “I won’t restrain them, but I won’t let what my generation is going through become their future.”

Housing Costs

Chao has broadened her fight to money as well as working conditions. Though Macau requires that casinos hire locals for key jobs, including dealers, pay hikes have been undercut by inflation, especially in housing costs.

The average monthly salary for Macau dealers was 19,000 patacas ($2,380) last year, an increase of about 4.6 percent per year over 10 years, said Carlos Siu, an associate professor of gaming research at Macao Polytechnic Institute. Inflation also rose 4.6 percent over that period.

“The workers feel they’re bearing the brunt of inflation despite the explosive growth of the city’s gaming industry over the decade,” Siu said.

Raises, Bonuses

The casinos are making an effort to keep the peace, perhaps in part because of the profits they have to protect. Galaxy, Sands China and Wynn Macau have all announced additional staff bonuses in recent months. After more than 1,000 protesters marched in front of Galaxy’s property last month, Lui said he would consider distributing stock to the casino’s employees.

Sands China said last month it had boosted wages for some workers 5 percent, improved benefits and agreed to pay one month salary as a special reward. Galaxy, Wynn Macau, MGM China and SJM declined to comment further when asked about the union’s demands and protest plans. Sands China and Melco Crown didn’t comment.

Melco Crown rose 1.6 percent to HK$71.85 at the close of trading in Hong Kong, while SJM gained 0.7 percent and Galaxy was up 0.6 percent. Sands China fell 0.2 percent, while Wynn Macau and MGM China ended unchanged. The benchmark Hang Seng Index was little changed.

The Frontline union, made up most of casino dealers, has stepped up its protests to seven this year from two last year. Besides higher salaries and better working conditions, they want stricter rules written into law to ban foreign workers from taking their jobs.

Chain Smoking

Smoking remains a contentious issue. Many of the mostly male punters chain-smoke to stay awake while they gamble throughout the night. VIP rooms are often cloudy with smoke.

While the city’s health agency announced in May that all casinos are required to implement smoking bans on their gaming floors beginning Oct. 6, the restriction doesn’t include VIP rooms, said Antonio Ng, an elected Macau lawmaker. Among protesters’ demands on last week was a call for the ban to extend to these rooms, which are reserved for high-rollers who bet at least HK$5 million ($645,000) per trip.

Casinos have lifted Macau’s economy since the colony was transferred to China’s rule in 1999. Macau’s gross domestic product per capita, measured in current U.S. dollars, gained more than sixfold since the handover to $91,376 in 2013, making it among the richest territories globally after Luxembourg, Norway and Qatar, according to the World Bank.

Bargaining Power

Macau’s casinos are counting on more growth. All six of the city’s operators are opening new resorts, beginning next year, and they are looking to hire more workers.

“We’ll see the bargaining power of the casino worker union strengthen because of the limited number of labor,” said Elio Yu, an associate professor for public affairs at the University of Macau. “The dealers are taking advantage of this and will try to escalate the situation further.”

The labor market is tightening. Macau’s unemployment rate held at a record 1.7 percent from May through July, government data showed.

The cost of labor will probably rise 10 percent to 15 percent annually in the coming years for the casino companies, according to Deutsche Bank analyst Karen Tang. That will erode margins, she said.

Workers are determined to improve their lot. Last week, they marched through Macau waving black-and-white banners that read: “Share the fruits of economic boom, we fight for a higher pay.”

Chanting Slogans

Stopping outside the city’s casinos, the protesters blew whistles and chanted slogans. Police officers and security guards put up barricades, with some of them linking hands as they blockaded the casinos’ entrances to prevent demonstrators from entering. Chao said 7,000 turned up for the protest, while police put the number at 1,400.

Weng Yi-jian, a 45-year-old dealer at Sands China’s Venetian casino, joined the rally outside his place of employment. He said his monthly pay has risen about 6 percent annually over the last seven years to 19,000 patacas, but that’s too slow to keep up with spiraling property prices which rose by tenfold in the past decade.

“I thought being a dealer would allow me to buy a house in a few years; I realized it’s just a dream,” said Weng.

He chanted with the crowd.

“Shame on Sands for bullying workers!”

That day, Chao marched with her 13-year-old daughter near the front of the crowd. The workers chanted as they held up the black-and-white banners. The youngster followed closely, clutching her mother’s handbag.

Chao ended up drenched in sweat in the sweltering heat. Nevertheless, she wanted to capture the moment. She pulled out a camera and handed it to her daughter.

“Can you take a picture of me?” she said.

--With assistance from Vinicy Chan in Hong Kong.