Only 12 of Macau’s casinos and slot-machine parlours are offering smoking lounges on their mass floors to gamblers, the government confirmed in a statement over the weekend.
That means 16 gaming venues – out of the 28 that actually told the government how they planned to respond to the administration’s proposal for smoke-free casino floors – have had to adopt a default position; i.e. to go completely smoke-free on their mass floors, including the so-called premium mass areas, at 12.01am on Monday.
The city’s Health Bureau said that as of Friday it had received requests from 28 casinos planning to set up an aggregate of 62 smoking lounges.
“There were 12 casinos whose projects were approved and their smoking lounges were authorised [to start operation],” the Health Bureau said in a statement. These gaming venues have a total of 28 smoking lounges, according to Health Bureau officials.
“Other casinos have not yet completed all the procedures,” the bureau said, adding that some have not completed construction works and that others are awaiting inspection and approval.
As such, several casinos had to go 100 percent smoke-free in their mass floors on Monday. The full ban would remain until the smoking lounges are approved and operational.
Macau has 35 casinos in operation and five slot-machine parlours, data from the city’s Gaming Inspection and Coordination Bureau show.
The implementation of the new rules however seemed to have caught Macau casino operators by surprise because of a change in interpretation.
The new rules allowed casino operators to request to set up smoking areas with gaming tables and slot machines on non-main floor zones “that would be of limited access to specific games and gamblers”.
This was up until now understood to cover not only VIP rooms but also premium mass gambling areas when they were physically isolated from main floors.
The Macau government however told operators that the smoking ban on mass floors includes any enclosed premium mass areas on those floors.
“This suggests that the recent construction of enclosed private gaming areas – at least for now – was an effort in futility,” analysts at Union Gaming Research Macau Ltd wrote in a note on Monday.
“We would point out that because operators were under the impression that smoking would be allowed in fully enclosed private gaming areas (to include premium mass), they did not build any smoking rooms within their premium mass areas,” analysts Grant Govertsen and Felicity Chiang wrote.
The research house expects a new wave of construction to begin immediately to create smoking rooms within premium mass areas.
“In the interim, we would expect negative short-term impacts due to confusion in regards to the new rules, and the lack of smoking rooms within premium mass areas,” they said.
The change in interpretation comes after several casino labour activist groups voiced concerns about operators converting part of their mass-market floor areas, namely high-limit gaming areas, into ‘limited access areas’ to allow smoking and gambling inside.
Cameron McKnight and Rich Cummings, analysts at Wells Fargo Securities LLC, said the labour groups pressure could be the reason behind the change in interpretation.
“Given Hong Kong’s situation, we feel the [Macau] government is sensitive to protests, and is possibly encouraging operators to follow the spirit, rather than the letter, of the smoking regulations,” they wrote in a note on Monday.
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"The stronger mass growth [in Macau in the second quarter] should be viewed positively vis- à-vis [the] government’s stated priority”
Japanese brokerage Nomura