Macau Casino Smoking Ban Blamed for Dwindling VIP Play, Professor Says Gamblers Like Booze, Cigarettes

Posted on: October 17, 2019, 10:41h. 

Last updated on: October 17, 2019, 10:41h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Macau casino VIP win dropped more than 22 percent in the third quarter compared to July, August, and September 2018, and one local gaming expert says the ban on smoking inside the gaming venues is to blame.

Macau casino smoking lounge GGR
Smoking lounges inside Macau casinos are slowing VIP play according to one gaming industry observer. (Image: Macau Daily Times)

Gross gaming revenue (GGR) statistics supplied by the enclave’s Gaming Inspection and Coordination Bureau reveals that VIP baccarat win totaled MOP$31 billion ($3.84 billion) in the third quarter, a 22.4 percent year-over-year drop.

Zeng Zhonglu, a professor at the Macau Polytechnic Institute Center for Gaming and Tourism Studies, says blame the smoking ban.

While there is no smoking ban in Las Vegas, in Macau, smoking inside casinos is banned,” Zeng told the Macau Daily Times. “If you are a gambler and you want to smoke, the casinos ask you to smoke outside, and you will lose your interest in gambling.”

The professor added, “I don’t mention that smoking is already banned in the mass market, but also banning smoking in VIP rooms? Banning smoking in VIP rooms is one of the direct causes behind Macau’s gaming industry growth slowing down.”

GGR Culprit

Macau casino win suffered from China President Xi Jinping’s regulatory directive to law enforcement to better monitor junket groups that bring wealthy mainlanders to the Special Administrative Region, where gambling is permitted. The six licensed casinos saw their collective GGR haul tumble from more than $45 billion in 2013 to $37.8 billion last year – a 16 percent decline.

But Zeng believes the smoking prohibition is hurting high roller play just as much. The gaming professor says VIP gamblers fancy not only the risk of a bet, but also alcohol and cigarettes.

Macau banned smoking on casino floors in 2013, but VIP rooms were provided exceptions. That changed effective January 1, 2019, which outlawed tableside smoking in the private gaming parlors.

Smoking is now restricted to enclosed lounges that are highly regulated and required to have adequate ventilation systems that force the harmful smoke out. While cigarette smoking is on the decline in many countries, the World Bank estimates there are more than 300 million tobacco users in China, with one in two adult males regularly lighting up.

Lounging Around

The Macau Health Bureau said as of September 30, there were 606 smoking lounges inside casino venues across the enclave that meet the necessary regulatory requirements. The average casino venue has 18 smoking lounges.

Macau is presently home to 45 casinos that are operated by the six licensees. Smaller hotels can partner with the gaming operators to incorporate table games and slot machines into their facilities.

GGR year-to-date is down 1.7 percent to $27.29 billion. The fourth quarter isn’t expected to turn 2019 positive.

Gaming analysts at JPMorgan are predicting a six percent casino revenue loss in the final three months. However, the financial firm opines it could be a “cyclical bottom,” and that “demand can rebound into 2020 on easy comps, better liquidity in China, and alleviation of 2019 headwinds (namely VIP smoking ban, junket noise, Hong Kong social unrest, capital control).