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Las Vegas Sands Finds Casino Troubles Even in Macau
MACAU, CHINA --
Las Vegas Sands has had a long fall and winter already, economically speaking. The company has fought off problems involving liquidity and credit covenants, causing such desperate measures as majority owner Sheldon Adelson lending his company almost a billion dollars to fend off bankruptcy. But the saving grace for the casino gambling operator was to be Macau.
Macau is the city that in a few short years had raced past Las Vegas as the gambling revenue capitol of the world. Macau's casino take was virtually doubling year after year, and Las Vegas Sands owned the Venetian Macau, the largest casino in Macau and the world.
But now yet another disappointment has befallen Las Vegas Sands. The Chinese government, worried about infrastructure and labor problems and unhappy over a massive cash flow leaving the country, acted to limit visitors from the Mainland. Those moves, along with effects of the recession, has caused forecasts of casino income in Macau to remain relatively flat from 2007 to 2008.
That's a huge adjustment from the predictions last winter of triple-digit growth. Added to the problem is that the Venetian Macau wasn't even open until August of 2007, meaning that revenues are the same even though more and bigger casinos are open.
For now, Las Vegas Sands has laid off five hundred Macau employees including one hundred managers. The number only represents two percent of the Macau staff, but coming from the one expected bright spot in Las Vegas Sands holdings, 2009 could be a long year.
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