Macau gaming suffers in struggling economy

MACAU, China – For almost a decade, Macau has been Asia's gambling Mecca, riding a surge of Chinese prosperity and Las Vegas investments that have turned the city into "Las Vegas East."

Last year, gaming income grew 30%, according to the Times of London. But in the third quarter of this year, the impact of the financial crisis facing much of the world hit Macau hard.

Gambling revenue dropped 10% to $3.2 billion in the third quarter, according to the New York Times.

The decline in revenue, combined with the global credit crunch, prompted the Las Vegas Sands, which owns and operates the Venetian Macao, to lay off as many as 11,000 construction workers in Macau this month after suspending construction on a $12 billion casino in the Cotai District of Macau. Las Vegas Sands' shares are down 95% since its peak last December, according to Time magazine.

The Chinese government has also taken steps to slow down the growth of gambling in Macau. In April, Macau's chief executive, Edmund Ho, announced that no new gambling licenses would be issued, according to Time. And the government in mainland China has imposed stricter visa policies for Chinese residents visiting Macau. According to the Times of London, the new policies will limit visits by mainland residents to six times a year. And that's not good news for Sheldon Adelson's Las Vegas Sands, or Wynn Resorts and MGM Mirage, which also have built huge resorts in the former Portuguese colony.

As the Times of London reports, casino developers were counting on visitors to Macau spending 3.5 nights a visit. Right now, visitors are spending 1.4 nights. And with the Chinese economy slowing down, it doesn't look that number is going turn around anytime soon.