Bureau director: Smoking ban will be good for tourism
In written correspondence to a local lawmaker, the Macau Health Bureau conceded that a full smoking ban in the city’s casinos would mean a 2.7 percent to 4.6 percent reduction in casino gross gaming revenue. It’s the first time city officials have publicly acknowledged that the proposed ban would cause the struggling industry to decline even more.
GGR for the first eight months of 2015 fell 36.5 percent from the same period in 2014, in large part due to the anticorruption campaign of the Mainland Chinese government, as well as the slowing Chinese economy. According to GGRAsia, Deutsche Bank has forecast a possible impact of up to 15 percent on VIP revenue under a total smoking ban. The firm pointed out that mass gaming revenue plummeted 12 percent after mass floors went smoke-free in October 2014.
According to the Macau Business Daily, Health Bureau Director Lei Chin Ion predicted the GGR drop in a letter to legislator Si Ka Lon. ‘The consuming ability of these smoking tourists is two times higher than non-smoking tourists,” the director wrote. “Hence, if 20 per cent of the smoking tourists stop coming to Macau to gamble, it is assumed that the city’s gaming revenues will be affected by 2.76 to 4.6 percent.”
Lei said the proposed smoking control ban, which may be implemented in 2016 or 2017, will improve tourism in the city. “We estimate that only a small proportion of smoking tourists will come to Macau fewer times following the implementation of the full smoking ban. However, the policy will attract more non-smoking customers for the gaming industry.”
Meanwhile, Union Gaming analyst Grant Govertsen crunched the numbers. “Based on our observations of smokers in Macau, the average time to smoke a cigarette is typically less than three minutes,” said Govertsen. “However, given that the smoking ban would necessitate persons leaving a casino and going to a sidewalk, the time per cigarette is likely to more than double to something like eight minutes (if not more).”
