Smoking has become an activity that is looked on very negatively in a range of public places around the world. Casinos in Macau are now looking at having smoking banned on their premises by the Macau government.
Legislation has been proposed by the government to ban all smoking in casinos, including in VIP rooms. On mass gaming floors, the planned legislation would allow for smoking pods, currently seen in airports. Smoking on mass gaming floors has been banned since October 2014.
Alexis Tam Chon Weng, Macau’s Secretary for Social Affairs and Culture, announced on Thursday of last week that the legislative bill will be submitted in the first six months of 2015. Although Macau is seeing a continual decline in casino gaming revenue each month, the situation will not cause the government to reconsider its bill to create a smoking ban in all casinos and slot-machine parlors.
The government of Macau seems to be taking a very strong stance against smoking, with the Secretary also announcing that the government would propose a 70% tax on cigarette packets, bringing Macau into line with World Health Organization (WHO) recommendations.
Macau already has laws against smoking in public places, and on Wednesday a fine was given to City of Dreams Macau, a five star hotel and gaming venue. The fine was granted due to an alleged failing to place ‘No Smoking’ signs in one area inside its casino. The group that owns City of Dreams, Melco Crown Entertainment has committed to challenging the government’s $12,524 equivalent fine.
There are concerns among some that the new ban on smoking in VIP rooms in casinos will have a negative financial impact on Macau’s gaming industry. Deutsche Bank analyst Karen Tang predicts that there will be between 10-15% loss made when the smoking ban is implemented in VIP rooms. This is based on the current deficit in profits experienced with the mass gaming floor ban. The two biggest losers if the legislation is passed are predicted to be Wynn Macau and Galaxy, due to their high exposure to VIP. Melco Crown looks to take another hit as well, after its premium mass areas, which account for over a third of its pretax earnings, were reclassified.