Nov. 11 (Bloomberg) -- Macau's government will take over any casino that goes bankrupt in the world's largest gambling hub by revenue, Chief Executive Edmund Ho said today.

``Our policy is that we will not allow any casinos to just shut down and cease operations,'' he told reporters after delivering his annual policy address. He stressed that he was referring to a worst case scenario and not to Las Vegas Sands Corp., which warned this week that it may be forced into bankruptcy.

Ho said his government is ready to take over the operations of a casino until the economy improves and gaming revenue growth ``returns to normal.'' Macau, the only Chinese city where casinos are legal, has only six gaming licenses ``worth a lot of money,'' and that he was sure there would be interested buyers for them, he said.

Casino gambling revenue in Macau has more than doubled since 2004, when the government ended the 40-year monopoly of Stanley Ho, who's not related to the chief executive, and allowed foreign companies Las Vegas Sands, Wynn Resorts Ltd. and MGM Mirage to operate. The chief executive said average monthly revenue is expected to fall to 7 billion patacas ($877 million) next year from 8.2 billion so far this year.

Las Vegas Sands, run by billionaire Sheldon Adelson, said yesterday it's suspending construction in Macau to conserve cash after a third-quarter loss amid slowing growth in the former Portuguese colony where it earns about two-thirds of its sales. It is also raising $2.14 billion in capital.

Macau Casino Taxes

Macau's government will not take a stake in Las Vegas Sands, Ho said today.

``We are already taking in 40 percent of their revenue in taxes, why would we want to take a share of ownership?'' he said.

Ho, who earlier said his government's priority was to safeguard employment and pledged 10.2 billion patacas in public spending, said Macau would not lower its 39 percent casino tax rate.

``The government will discuss any reasonable co-operation agreement with industry leaders,'' he said in his policy address. ``Our main strategy remains using resources gained from gambling to help with the development of leisure and tourism.''

Gambling revenue in Macau was 26 billion patacas ($3.26 billion) in the third quarter, 10 percent less than the previous three months. Still, compared with the third quarter last year, Macau's casino revenue grew 28 percent.

The city's gambling growth slowed amid a worsening of the credit crisis and measures by the Chinese government to restrict its citizens' travel to the city. Macau is a special administrative region which mainland Chinese need a visa to enter.

Tourism Declines

Macau had 2.31 million visitors in September, 10 percent less than the previous month and the lowest number since July 2007, according to data compiled by Bloomberg. The city had 22.5 million tourists in the first nine months, 15.4 percent more than in the previous year.

Ho said he would talk to the government of neighboring Guangdong province about the visa restrictions ``at an appropriate time'' next year, without elaborating.

Las Vegas Sands, whose Venetian Macao is Asia's largest casino resort, has lost 92 percent of its market value this year on investor concerns that falling revenue and the financial meltdown will leave it short of cash to fund expansion projects or repay loans. It was usurped as the world's largest casino company by market value in the past month by Wynn Resorts Ltd. MGM Mirage is second biggest.

The casino operator expects to finish an ``oversubscribed'' sale of debt or equity this week, including contributions from the Adelson family, to remove the risk of the parent company tripping loan covenants, executives said yesterday on a conference call. A ``major Chinese bank'' may also lend the company as much as $700 million to resume the stalled Macau projects, Adelson said.

Las Vegas Sands needs the cash to avoid violating the terms of some U.S. loans and setting off a series of defaults that may force it into bankruptcy. The company said yesterday it will halt work on developments in Macau to focus on its $4 billion Singapore project.

To contact the reporter on this story: Kelvin Wong in Macau at kwong40@bloomberg.net

Last Updated: November 11, 2008 07:18 EST