Macau Smoking Ban Clouds Casinos’ Future
by Warwick Bartlett
Standing on the gaming floors of Macau’s casinos looking at crowded gaming tables stretching as far as the eye can see it is hard to envisage a slowdown in the casinos’ gaming revenues. But on 1 January 2013 the government of Macau is to introduce a partial smoking ban in its casinos. When introduced in other countries total smoking bans have led to a fall in gambling revenues of between 15% and 20% over a full year. For the casino operators the situation is even worse because a 1% fall in revenue can equate to a 4% fall in net profits.
In Macau the smoking ban will require 50% of a casino property’s total public area to be smoke free. This percentage incorporates the gaming floor but also lobby areas and restaurants within the property. Existing casinos will not be required to have a physical partition separating smoking and non-smoking areas of the gaming floor but air quality in the non-smoking area must meet certain standards. Future casinos will be required to have a physical partition on the gaming floor.
With around 80% of government revenue coming from gambling in Macau the smoking ban may prove to be a risky strategy.
From the Government’s perspective its citizens’ health is paramount and smoking (or inhalation of other’s smoke) can cause up to 40 known diseases in people.
Macau’s main catchment area for smokers is mainland China where the prevalence of smoking is very high. According to a World Health Organisation survey 63% of men aged 45 to 64 years of age are smokers.
The urge to smoke is far greater than the urge to gamble so as the gambler leaves the tables to go outside and smoke a break in play occurs and the gambler is taken away from the ‘trance’ of gambling and is given time to re-consider their situation. If their gambling has been profitable they may decide to call it a day, if they are losing they may decide that they have lost enough.
In Atlantic City the smoking ban extends to 25% of the casino floor. The city briefly banned smoking in casinos in 2008 but this led to protests from the casino owners who complained their customers were leaving them in droves to gamble elsewhere. The ability to go elsewhere to gamble for most mainland Chinese is not an option.
An interesting development is that the new Revel Casino which opened on the Boardwalk of Atlantic City this year is completely smoke free from the management’s choice.
For the time being it would seem Macau’s gaming revenues may be spared. But the march towards a total ban will be relentless. SJM Holdings’ managing director Angela Leong has already indicated her support for a full smoking ban in casinos.