The government of Macau will ban smoking on the city’s public casino floors by October 6, meaning gamblers will have to retire to sequestered, airport-style smoking rooms to light up.
The change is designed to improve air quality for casino workers from the unacceptable rates achieved by a partial ban enacted in 2013 that left 50 percent of gaming areas available to smokers and moved operators to shift table games, and staff, into the smoking halves.
The ban will not apply to VIP rooms, although technically it will require half their total floor area to be non-smoking.
It will, however, affect anywhere from half to 70 percent of the tables of the major operators.
“We think a full ban will have negative impact on (gross gaming revenue) as the speed of the game could slow down,” Morgan Stanley wrote in a note to investors. The investment bank said full smoking bans in place in the United States and Australia cut initial revenues by 4 percent and 20 percent, respectively.
In Macau the burden is likely to hit hardest among operators in older, smaller properties with limited space for building the smoking rooms.
The ban also could exacerbate tensions with the labor force, which is in seriously short supply in the market and protected from imported competition by government policy. Almost 60 percent of casino staff say they don’t want to work in the VIP rooms where smoking will be allowed, according to a recent survey conducted by the University of Macau on behalf of the Health Bureau, although a smaller number, just under 13 percent, said they would consider it in exchange for additional compensation.
Macau’s casinos generated US$45 billion in gaming revenue last year, the highest in the world by far, and most of it is contributed by gamblers from mainland China, which is home to more smokers than anywhere in the world and has one of the highest smoking prevalence rates. About one-quarter of the population smokes, compared to the global average of less than 20 percent.
