A major casino development in Macau has been put on hold, with up to 11,000 workers facing lay-off, as the global economic slowdown starts to bite into Asia's gambling industry.
Las Vegas Sands, which operates the giant Venetian gambling resort in the Chinese enclave, says it is facing a cash crunch as falling revenue from gamblers and the credit crisis make it difficult to meet debt obligations.
The Nevada-based gaming company has been hard hit by the economic downturn - both in Asia and its home market in the US - and has seen its share value plummet from $122 at the end of last year to under $6.
The company had planned to invest up to $13bn in developing a hotel and gaming resort on Macau's Cotai strip, but now says those plans are now on hold.
Announcing the decision on Thursday, Stephen Weaver, Sands' president for Asia, said the shutdown in construction was temporary, but gave no date for when work might resume.
"We've got $1.2 billion sunk in to the ground, we're not going to walk away from it," he said.
"I think there's no possibility that it's never going to start again."
|Sands has ploughed billions into its Macau casino businesses [EPA]
Since the ending of a casino monopoly four years ago, American gaming companies have been investing heavily in Macau, hoping to tap into a rich seam of gamblers from the Chinese mainland where gambling is illegal.
The boom has transformed Macau's landscape with several new casinos opening and pushing the territory's economic growth rate into double digits.
In just a few years, casino revenues had soared such that Macau now rivals Las Vegas as the world's number one gambling centre.
Recently, however, the global financial crisis has brought a marked slowdown in visitors to the territory and a slide in turnover at its casinos.
Factory closures in southern China and fears of a broader global recession have put the squeeze on some of Macau's highest spenders.
Visa restrictions on mainland tourists going to Macau have also hit visitor numbers.
|Sands and other Vegas operators have been looking to cash in on Chinese gamblers [AFP]
Earlier this year, mainlanders had been permitted travel visas twice a month, now Chinese authorities have cut that back to just one visa every other month.
The effects of the economic crisis have also been felt in nearby Hong Kong, where the territory's racecourse has seen dwindling numbers of punters and more cautious betting.
That in turn is having an impact on Hong Kong charities which rely on gambling revenues to fund their work helping the territory's poor.
Betting on horse racing is the only legal form of gambling in Hong Kong.
Earlier this week, the chief executive of the Hong Kong jockey club, the body that holds the monopoly on racing and betting in Hong Kong, warned that the industry faced a "potential tsunami" in the fallout from the global economic crisis.