Labor problem erupts at Adelson’s casino project in China

Thursday, Sept. 4, 2003 | 11:05 a.m.

A published report said the arrest of 23 Hong Kong residents last week at the site of Sheldon Adelson's Chinese casino project involved a a "dirty tricks" campaign to discourage American gambling entrepreneurs from competing with Asian rivals.

But a high-ranking Macau gaming regulator said construction sabotage on the site of the Las Vegas Sands Casino -- the name of the project in the Chinese city of Macau -- was in response to illegal laborers from outside the country working on the construction and not an organized effort to discourage foreign operators.

Manuel Joaquin das Neves, director of the Gaming Inspection and Coordination Bureau of Macau, discounted the report in Hong Kong's South China Morning Post that quoted unnamed sources saying a turf battle had developed in response to projects planned by two Las Vegas casino companies.

Adelson, chairman and chief executive of the Venetian hotel-casino in Las Vegas, already has begun construction of the first of two projects in the Chinese resort city. His second project is planned as a centerpiece of a cluster of hotel-casinos and would be a replica of the Las Vegas Venetian.

The other Las Vegas company with plans to build in Macau is Wynn Resorts Ltd., headed by Steve Wynn, but he has put construction on hold until Macau's lawmakers approve tax and gaming legislation. Lawmakers took a summer break in August, but will reconvene this month and take up new casino regulations by October.

Representatives of Adelson's companies could not be reached for comment on the reports of sabotage at the Macau casino construction site.

In its Aug. 30 edition, the Post reported heavy machinery and equipment was being tampered with, surveying pegs were removed and construction progress was slowed by nightly raids by "unknown assailants."

The newspaper said the 23 people who were arrested were either technicians or senior managers deployed to work at the Adelson project.

"This is clearly the work of the dirty tricks department who are tasked with hampering the efforts of the foreign operators trying to set up in Macau," the Post quoted a source who asked not to be named.

But das Neves, interviewed today by telephone, said he thinks the sabotage was the result of local laborers being angered that a Hong Kong company was contracted to develop the project. He said the people arrested were cited for not having the proper work permits.

"There are a few hundred people working on the project and only about 20 of them didn't have the right permits," das Neves said. "I talked with one of the Venetian executives and he said what happened would not delay construction of the project. I think the problem has been solved already."

Das Neves said Adelson hired Sincheong, a construction company based in Hong Kong with a proven track record. He said the Post story blew the controversy out of proportion and that many Hong Kong residents are envious of Macau's potential for success as a gaming resort.

Das Neves also said he isn't worried about published reports that Wynn would back out of his Macau deal if lawmakers don't expedite the gaming and tax legislation.

"Officially, our office has no comment on Mr. Wynn's remarks," das Neves said. "We have our own timetable to review these new laws. A team of lawyers has been examining some of the details and they will soon submit them to the Assembly, after which they will continue to work at their own pace."

Das Neves said he understands Wynn's frustration with the legislature, but new laws weren't expected to be drafted until the end of 2003.

"I don't believe that after working this long that he will quit," das Neves said of Wynn, who could not be reached for comment today.