A senior executive at Macau casino operator SJM Holdings Ltd says the complete ban on casino smoking sought by the Macau government is compatible with keeping enclosed smoking lounges on the city’s casino main floors.
“We think that casinos can still install smoking rooms, which is not in conflict with a smoking ban,” Ambrose So Shu Fai (pictured), chief executive of SJM Holdings, was reported by local media as saying on Tuesday.
Macau’s Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, announced on January 29 that the government would shortly propose a full ban on smoking inside casinos. On February 8, another official said he expected such a ban would come into force in 2016.
But SJM’s Mr So on Tuesday said in defence of retaining enclosed smoking lounges: “It is just like the smoking rooms in the airports in Hong Kong and Macau, where a full smoking ban is in place. We are only respecting the habits of smokers and they [smoking rooms] would not affect non-smokers…”
Macau’s largest labour grouping, the influential Macau Federation of Trade Unions, appears to disagree. On January 27 the federation said it would start collecting signatures to petition the government to ban smoking from VIP rooms and end smoking lounges on mass casino floors.
Smoking lounges – devoid of slot machines or gaming tables – have been in place on some Macau casino main floors since the autumn. The October changes barred all smoking on casino main floors, but permitted enclosed smoking rooms there and allowed smoking in VIP rooms to continue – provided they were physically separate from the main casino floor.
A ban on VIP room smoking could hurt Macau VIP gaming revenue by as much as 15 percent, suggested a note from Karen Tang at Deutsche Bank AG last month.
In other remarks on Tuesday, Mr So said the market-wide decline in monthly Macau gaming revenue seen consecutively since June 2014 meant casino operators had to improve their operational efficiency if they wanted to maintain the profitability of their operations. He stressed that didn’t mean employee layoffs but could involve reducing promotional expenses.
A number of investment analysts said separately in notes last week that rising wage costs for casino workers and rising promotional costs were putting pressure on margins. Several cited increased competition among operators for access to those high-value Chinese gamblers that are still coming to Macau.
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"Competition is tough in Macau and is also changing. It [the local market] is susceptible to a lot of macro factors”
Daisy Ho Chiu Fung
Chairman of casino operator SJM Holdings Ltd