Malaysian giant stakes casino gambit on illegal foreign labor
Written by Michael Lewis on January 8, 2014
If you harbor even a sliver of doubt about how promises Genting made in seeking a Miami mega-casino would play out, its pleas in federal court last week tell you all you need to know.
Genting pitched its casino as an economic engine: 30,000 jobs at what it called good wages and conditions – Genting told us workers would toil in air conditioning and wear uniforms, and all they’d need was a high school diploma.
But that pledge ignored one itty-bitty caveat: the people Genting really hires are foreigners who will work below $7.25-an-hour US minimum wage and without protection of US labor laws.
At least, that’s why Genting is in court.
Since July it had been running gambling cruises to nowhere while it’s otherwise occupied buying up votes to legalize a mega-casino that as announced would have been the world’s largest. Workers on those cruises included 250 foreign nationals paid less than the US minimum wage.
When immigration officials blew the whistle, Genting stopped the nowhere cruises Nov. 28 rather than hire US workers, saying they’re too costly.
In court, Genting argues that the Miami economy will be a big loser unless it gets to ignore wage and hour laws and keep on using those 250 foreign nationals rather than Miamians.
Genting also claims it will lose $11 million a year on its still-permitted Miami cruises to the Bahamas, where it has a casino to empty the pockets of passengers.
But Genting says it plans to push forward – no doubt counting on nearly $4 billion annual profit a casino of the size it sought in Miami could send back home to Malaysia to soothe the $11 million loss mosquito bite.
As the government notes, the Malaysian corporation in back of Miami operations has a $39 billion market capitalization. An $11 million loss is next to nothing for them.
But it’s the principle of the thing – and these folks are principled. Their principle is to say whatever they need to say to get operating, but once they’re open make sure they get every advantage, including ducking laws that apply to everyone else on the principle that they’re too big to fail.
That’s how casino gambling works: the house always wins. It sets the rules – all of them.
One way to do that is to either get every power base on board or at least neutralize them.
As it pushed forward a mega-casino, Genting had as tenants the area’s largest newspaper, the Miami Herald, which for two years was paying no rent after Genting gave its parent $236 million for the site to pay down ballooning debt.
It also had as tenants – and still does – the largest chamber of commerce, the Greater Miami Chamber, which made mega-casino support part of its legislative package.
At the official announcement of a mega-casino of untold size – a size that grew during the ceremony itself – mayors of the county and City of Miami were cheerleaders.
Genting retained a partner from almost every big law firm, thus neutralizing every other partner.
The announced $2 billion casino complex had every construction firm in the region present and salivating.
Genting announced, possibly prematurely, a partnership with the Arsht Center for facilities and shared use.
The Malaysian giant even pledged, incredibly, to finally make Miami a real city. Whoopee!
Even today, it’s paying PortMiami – that’s the county– $7 million a year to house its gambling cruise operations.
But, as the court case illustrates, Genting forgot to buy Washington. When the feds talk in court about Genting’s “bad business decisions,” that’s not what they’re referring to. Still, Genting must be kicking itself for the oversight.
Otherwise, it had planned well, even buying up land near the former Herald building to build dorms for its foreign labor.
The 50-mile Bimini gambling cruises to Genting’s own casino resort were doubtless designed to soften up the Miami market while behind the scenes Genting preps legislative and local government allies for the next big mega-casino push.
The evening cruises to nowhere on the same ship had an advantage for Genting: the house could take money from folks without passports who couldn’t go to Bimini. And, they’d use the same cheap foreign labor, which the US doesn’t allow on trips that don’t go to other nations.
Everything was set up for a multi-billion-dollar win for the house.
Then Washington got in the way of a hard-nosed business that makes its own rules on everything.
All Genting needs to do to protect a half-billion-dollar Miami investment is hire 250 local high school grads at wages less than McDonald’s and Burger King profitably pay tens of thousands of people every day.
But that would mean following rules that the rest of us live by. That’s not Genting’s way.
Would you still gamble on these folks as good corporate citizens?