GGRAsia – Smoking rules not to impact revenue classification: DICJ

Smoking rules not to impact revenue classification: DICJ

Aug 25, 2014 Newsdesk Latest News, Macau, Top of the deck

The Macau gaming regulator says the new rules governing smoking inside the city’s casinos will have “no obvious impact” on the official breakdown of casino gross gaming revenue (GGR) into mass and VIP.

“Gaming gross revenue is always listed and published by game types,” a spokesperson for the Gaming Inspection and Coordination Bureau (DICJ) told GGRAsia. “On the other hand, DICJ Instruction No. 1/2014 and other rules on smoking set the criteria for smoking areas,” she added.

“As such, no obvious impact is expected in our gaming gross revenue classification after the new rules are in force,” the spokesperson said.

The regulator classifies VIP baccarat and mass baccarat as two different games. Of all live dealer table games in the Macau market, only baccarat is dealt with in this way by the regulator. Live dealer baccarat in both its forms (excluding the live multi-game format featuring a dealer but electronic betting, which is tallied independently) accounted for 91.3 percent of market-wide GGR for the first half of 2014. VIP baccarat brought in 62 percent of overall GGR for the period.

“DICJ will consider a baccarat table as a VIP one when it is designated to [a] particular group of players, on which non-negotiable chips [are] used and the bet is comparatively high,” the spokesperson told GGRAsia. The person did not define what was meant by “comparatively high” or precisely what was meant by “bet”, i.e., table minimum bet, table maximum bet, or maximum payout per table.

All mass-market casino floors in Macau must go smoke-free starting from October 6, following that month’s Golden Week holiday.

According to the new rules on smoking inside casinos, casino operators can ask 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 is understood to cover VIP rooms but also premium mass areas that are isolated from main floors.

Nomura analysts last week had warned that starting from October any meaningful year-on-year comparison of VIP and mass-market GGR could become difficult, “depending on how the DICJ classifies premium mass revenues”.

Analysts Louise Cheung and Harry C. Curtis added: “As it stands, premium mass rooms that remain smoking after the October 6 mass floor smoking ban should technically fall under the VIP definition (i.e., VIP could be artificially boosted while mass appears lower) so it would be interesting to see how the DICJ ends up classifying those premium mass revenues.”