Now that the government of Macau has started micromanaging hiring and firing decisions on behalf of casinos, gaming companies may well be asking themselves: 'Who needs a human resources department?' The current standoff started earlier this summer when Galaxy Entertainment decided to lay off frontline and mid-level staff at two franchised casinos after business slumped to dismal levels. In the first round of layoffs the company axed 140 mid-level foreign workers at the Grand Waldo and President casinos. Then, in July, Galaxy said goodbye to 270 local casino staff, mostly dealers. The firing of the locals provoked a massive backlash by legislators and unions, who issued calls, variously, for the government to force all non-resident workers to wear some form of identification badge and even to revoke Galaxy's gaming licence. But the Macau government's response to the fracas has been both clumsy and worrying. After pointing out that 58 of the local workers dismissed in July had since completed a training course for pit supervisors, Secretary for Economy and Finance Francis Tam Pak-yuen responded last week with a tit for tat. He said the government was cancelling Galaxy's import quotas, or 'blue cards', for 58 of the company's foreign pit supervisors. In effect the government - the financial secretary no less - fired 58 of a private company's foreign employees, with the implication that it had better hire local replacements. This micromanagement approach by the government carries with it a litany of potential problems. But the biggest one is entirely of the government's own creation. Since the gaming industry was shifted from a monopoly to an oligopoly, the government's line in the sand on labour has been that casino dealers in the city must be 100 per cent local. This was a great idea a few years ago, when unemployment in Macau was running at 6 per cent and casinos offered well-paid jobs to the city's unskilled masses who were either first-time job hunters or refugees from the dying manufacturing sector. But today this policy is in danger of backfiring in spectacular fashion. The government has inadvertently created a generation of uneducated baccarat-dealing slaves and at the same time managed to stifle their chances of promotion. If that sounds too harsh, consider the circumstances. With unemployment at 2.8 per cent in the second quarter, only 9,100 of Macau's 330,000-strong labour force do not have jobs. Some of those people probably don't need or want to work. There are almost no more locals to hire. But because government policy insists all card dealers must be locals, the casinos are essentially forced to rely on imported labour to fill mid and upper-level gaming floor positions. The government desperately wants to see more local dealers promoted up through the ranks at casinos (as the case of the 'Galaxy 58' shows). But then who would be left to work as dealers? Of course, there are those 9,100 without jobs. But even assuming they are all eager for work, there were already 3,411 vacancies in the gaming industry at the end of last year. Three new Cotai mega-resorts will open next year that will require more than 15,000 casino staff. Where will those people come from? Macau's 20,000-plus card dealers are not slaves in an economic sense: at 13,226 patacas a month their average earnings are 65 per cent higher than Macau's median wage of 8,000 patacas. That, of course, is due to the government labour policies that have limited the supply of card dealers to locals while demand among employers has surged. But they are trapped. Trapped in a town where high-school dropouts earn more as card dealers than fresh college graduates do in nearly every other profession; trapped by government labour policy in their current roles because there are almost no locals left to replace them; trapped, ultimately, in a house of cards.