GGRAsia – Macau junkets warn of job losses if full smoking ban

Macau junkets warn of job losses if full smoking ban

Jul 03, 2015 Newsdesk Latest News, Macau, Top of the deck

A trade association of Macau VIP gambling room operators has warned that its members might be forced to cut salaries or even lay off staff because of the expected impact of a full smoking ban in the city’s casinos. About 3,000 to 5,000 employees working for the city’s junket operators might be affected, the president of the Macau Junket Operators Association, Kwok Chi Chung, told Chinese-language newspaper Macao Daily News.

Mr Kwok estimated that revenue from VIP rooms might fall between 30 percent and 50 percent if a proposed full smoking ban in casinos is enacted, extending the decline seen in the city’s gross gaming revenue (GGR) for 13 consecutive months.

A new tobacco control bill including provisions to outlaw smoking lounges on mass floors as well as smoking in VIP rooms was announced on Tuesday, and could come into force early next year. The territory’s Legislative Assembly is yet to schedule a debate on the government’s proposed bill.

Investment analysts have said removing mass floor smoking lounges could shave 10 percent from mass market gaming revenue, and as much as 15 percent from VIP revenue if players at tables and gaming machines are forced to go outside casino premises for a cigarette.

Macau GGR fell 36.2 percent year-on-year in June to about MOP17.36 billion (US$2.17 billion), according to official data.

On Thursday, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, said the government would closely monitor what he called the “adjustment phase” of the city’s gaming industry.

The official additionally said that recent data did not show a significant increase in the number of jobless people in Macau – the city’s overall unemployment rate rose by 0.1 percentage point to 1.8 percent in May, after more than a year at 1.7 percent. Mr Leong added that about 59 workers from eight VIP rooms have so far asked for help from the government.

The Macau government announced in January the establishment of a task force on the gaming industry. The main goal was to address the issue of potential job layoffs in the sector.

According to English-language newspaper Business Daily, the Macau Junket Operators Association represents some of the biggest VIP promoters in Macau, including Suncity Group, Tak Chun Group and Hong Kong-listed Jimei International Entertainment Group Ltd. Mr Kwok is also an independent non-executive director of Jimei International, the newspaper reported.

The Macau Junket Operators Association in May had a meeting with Secretary Leong to petition the government to allow smoking lounges inside VIP rooms. Mr Kwok reiterated that call in the association’s latest comments. He added that representatives of the association would also seek to schedule meetings with members of the city’s Legislative Assembly to express its concerns. Some legislators have already voiced fears that a casino smoking ban might have a negative effect on the city’s whole economy.

Macau’s six casino licensees have repeatedly asked to be allowed to keep smoking lounges in their venues if a full tobacco ban is approved. They have also called for an “in-depth study” to evaluate what economic effects such a ban and other proposed tobacco control measures would have.