Macau boss calm as gaming suffers

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Macau's Chief Executive Edmund Ho has offered a raft of measures to help residents and small businesses in his annual policy address.

He said the territory, which has autonomy under Chinese rule, would survive the gambling industry's woes.

One of Macau's biggest investors, Las Vegas Sands, has revealed problems in debt-servicing and a halt to projects.

Gambling, Macau's main revenue source, has faltered since China restricted visas for mainland gamblers.

Mr Ho said he will not cut the 39% tax on gaming revenues, nor would his administration support casino investors in trouble.

Resident rescue

"As to the expectation that Macau will be going through a difficult time next year, the government has already made sufficient preparation in terms of policy and financial resources," he told legislators.

Mr Ho promised Macau homebuyers and small investors a raft of perks, including subsidies on new homes and household bills, salary tax breaks, and a handout to students.

He offered extra loans for small- and medium-sized businesses and 10.2bn patacas ($1.3bn; £840m) for new infrastructure projects, including improvements at heritage sites, as well as new public housing and railways.

Increasingly vocal middle-class groups in Macau have expressed unhappiness at what they have described as rampant casino growth and related social ills such as students dropping out of school to become croupiers, and residents being priced out of the local property market.

China limits

"A tax cut for the gaming business has never been in our consideration," he told reporters after his speech.

Instead, he said the government would focus on using its revenue from gaming to boost other parts of the tourism sector, adding he wanted to attract more visitors from South East Asia.

Correspondents said this was taken as a sign that curbs on mainlanders visiting Macau's casinos appeared likely to stay in place.

In recent months the Chinese government has limited the number of people allowed in to Macau in order to stem outflows of cash. Gambling is illegal in China.

As a result, while Macau's gross domestic product grew by 26% in the first half of 2008, its gaming revenues fell 10% in the third quarter after four years of spectacular growth.

Casino catch

The global credit crisis, alongside the visa restrictions, have placed some casino operators in serious difficulties.

Huge construction projects under way on the Cotai Strip are now under threat.

US-based Las Vegas Sands, which last year opened the 5,000-room Venetian casino in Macau, costing $2.4 billion, has seen its US-listed share price fall amid worries about its heavy debt levels.

On Tuesday, Sands said in a statement it was halting part of its huge development in Macau due to trouble accessing credit, although it said it was in the process of raising $2bn in new funding.

However, its Marina Bay development in Singapore would go ahead, the company said.