The Macau government and casino operator Melco Crown Entertainment Ltd have different legal views on the interpretation of the latest set of smoking rules, the head of the city’s Health Bureau, Lei Chin Ion (pictured), admitted on Wednesday.
The bureau and Melco Crown are embroiled in a dispute over a smoking area at City of Dreams, the company’s flagship casino resort in Cotai.
The Macau government accuses the company of having transformed a non-smoking area into a smoking area without receiving authorisation from the Health Bureau. Melco Crown said in a press release last week that its operations are compliant with Macau legal requirements and that all its smoking areas have been approved for smoking since 2012 by an executive order from the Macau government Chief Executive.
Since October 6, smoking on casino main floors is only allowed in enclosed airport-style smoking rooms that do not contain any gaming tables or slot machines.
In the run up to the new smoking regime, guidance from government officials was that casino operators would be able to set up smoking areas with gaming tables and slot machines on non-main floor zones “that are of limited access to specific games and gamblers”.
This was understood by casino managements to cover not only VIP rooms but also premium mass gambling areas when they were isolated from the rest of the mass-market floor.
However less than one week before the rule changes were implemented, a press statement from the Health Bureau said smoking would not be allowed in premium mass areas of any kind.
Bureau head Mr Lei on Wednesday confirmed the government had already started “legal procedures” against Melco Crown. He said the gaming operator faced being fined for failing to put up no-smoking signs in the area under dispute at City of Dreams.
Nomura International (Hong Kong) Ltd analysts Louise Cheung and Stella Xing said in a note on Wednesday that “there continues to be uncertainty over the application of the smoking ban as evidenced by the ongoing confusion over the newly converted City of Dreams smoking area.”
They added: “Smoking was permitted when we visited and we had to show a membership card to enter the enclosed area. Other operators are keenly following the outcome to determine if they can pursue the same strategy.”
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