• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Worst case 3.3 pct dip in Macau GGR under smoking changes

Oct 10, 2014 Newsdesk Latest News, Macau, Top of the deck  


Worst case 3.3 pct dip in Macau GGR under smoking changes

A “worst case scenario” under the latest smoking rules for Macau casino main floors – that came into effect on Monday – is for a loss of up to 3.3 percent of gross gaming revenue (GGR) annually, and a 6.3 percent haircut for casinos’ earnings before interest, taxation, depreciation and amortisation (EBITDA).

The possibility is raised in a note on Thursday from Union Gaming Research Macau Ltd analysts Grant Govertsen and Felicity Chiang.

They wrote: “This analysis assumes that first half of 2014 VIP GGR would have been unchanged, while first half of 2014 mass and slot revenue would have been 8.9 percent lower. Based on the relative mix of VIP versus mass versus slot/ETG [electronic table game] GGR in first half 2014, the blended result is a 3.3 percent ‘decline’ in total GGR.”

Praveen Choudhary of Morgan Stanley in Hong Kong, said in a note in December 2012 – when Macau casino floors were still totally open for smokers – that the introduction of complete casino smoking bans in jurisdictions in the U.S. and Australia had resulted in annual gaming revenue falling by between “4 percent and 20 percent”, with the average being 12 percent.

But the picture in Macau has been clouded by casino smoking experiencing a lingering demise rather than a one-time outright ban.

On January 1, 2013, the city introduced a partial ban on the main floors, with casino operators allowed to allocate not more than 50 percent of their gaming areas to smokers.

But that policy came under pressure as much vaunted “air curtains” – extraction systems supposed to whip the smoke away from non-smokers’ lungs – proved of variable effectiveness.

Many casinos failed air quality tests mandated by the city’s Health Bureau under the policy. And the increasingly restive workforce of table games dealers – made up entirely of locals – started to become more vocal in their complaints about the risk to their health of concentrating smoking on certain parts of the floor.

After a lengthy consultation process, it was decided to ban smoking from all open areas of the main floors from October 6.

In return casinos were allowed to build on main floors enclosed smoking areas without any gaming tables or slot machines – similar to smoking lounges found at some airports. Casino managers have pointed out however that anything requiring a player to leave the table or the slot machine is likely to result in a drop in gambling yield from that player.

Smoking is still allowed in Macau VIP rooms – that provide around 60 percent of all Macau’s GGR – even under the policy introduced on Monday. Most VIP areas are in places physically separate from the main casino floor.

Casino operators had thought the exemption would also apply to premium mass areas provided they were in places – in the language of the guidance from officials – “of limited access to specific games and gamblers”.

In the end the government decided the mass floor ban applied to premium mass as well. That is likely to have proportionally the most impact on mass-market GGR given the high betting volumes typically seen in the segment.

On Monday, only 12 of Macau’s casinos and slot-machine parlours had smoking lounges in operation on their mass floors, according to the government. The Health Bureau confirmed later on that some of the city’s biggest and most profitable casinos had to go entirely smoke free on their main floors.

Brighter outlook

Union Gaming said in its note on Thursday however that it did not expect its worst-case scenario for GGR and EBITDA to be realised.

The analysts wrote: “We think the average casino patron typically will play on any single table for about 30 to 40 minutes. As such, the transit time between tables therefore becomes a natural time for a smoke break…”

The note said this was based on an average casino patron consuming two cigarettes per hour – a consumption rate it said was higher than the daily national average for mainland Chinese smokers as assessed by the medical journal The Lancet.

Another reason it cited for avoidance of the worst case was that Macau is a destination market – not a locals market as is the case with many U.S. casinos. As such, Macau gamblers were “unlikely to cut short or even cancel their visit due to smoking rules,” said the research house.

The analysts did say there were “probably not enough smoking rooms” at present, adding “…given the last minute rule change, we believe most (if not all) casinos will look to eventually add more smoking rooms to their floors, including in the premium mass areas which currently do not have smoking rooms.”

The research paper did caution however – referring to the recent street demonstrations by casino dealers for better pay and conditions – that “the recently-empowered casino dealers could continue to agitate (and threaten public unrest via marches and strikes) for a sooner-rather-than-later extension of the smoking ban to include VIP rooms.”


  • tweet
Related articles
  • Macau catalysts distinct from other China sectors: MS
    Macau catalysts distinct from other...

    May 24, 2023  

  • Macau May GGR set for new post-Covid peak: brokerage
    Macau May GGR set for new post-Covid...

    May 22, 2023  

More news
  • No Macau op yet asked GGR tax rate exemption: govt
    No Macau op yet asked GGR tax rate...

    Jun 09, 2023  

  • IGT casino, digital biz listing has potential: analyst
    IGT casino, digital biz listing has...

    Jun 09, 2023  


Latest News

No Macau op yet asked GGR tax rate exemption: govt

No Macau op yet asked GGR tax rate exemption: govt

Jun 09, 2023  

None of Macau’s six gaming concessionaires have so far applied for a form of “exemption” from the full 40-percent tax rate on casino gross gaming revenue (GGR), as potentially applicable...
Read More
IGT casino, digital biz listing has potential: analyst

IGT casino, digital biz listing has potential: analyst

Jun 09, 2023  

G2E Asia 2023: Singapore

  • Jackpot tech focus on tables not just slots: Paltronics
    Jackpot tech focus on tables not just slots: Paltronics

    Jun 09, 2023  

    Commercial opportunities for utilisation of...
  • Konami taps market-tried slots to refresh Asia op offer
    Konami taps market-tried slots to refresh Asia op offer

    Jun 08, 2023  

    Gaming content and equipment maker Konami says it is...
  • L&W building game content across 3 pillars: Ken Jolly
    L&W building game content across 3 pillars: Ken Jolly

    Jun 07, 2023  

    Casino gaming content and hardware provider Light &...
  • ETGs rapid growth segment in Asia: Interblock Michael Hu
    ETGs rapid growth segment in Asia: Interblock Michael Hu

    Jun 06, 2023  

    Electronic table games (ETGs) supplier Interblock dd is...
  • GLI offering RNG test tools, cybersecurity demand growing
    GLI offering RNG test tools, cybersecurity demand growing

    Jun 05, 2023  

    Random number generator (RNG) testing tools are among the...
  • Alfastreet’s new Verso cabinet heading to Asian markets
    Alfastreet’s new Verso cabinet heading to Asian markets

    Jun 01, 2023  

    Alfastreet, a manufacturer of electronic gaming machines,...
  • Sega Sammy Creation growing land-based, eyes online
    Sega Sammy Creation growing land-based, eyes online

    Jun 01, 2023  

    Casino equipment maker Sega Sammy Creation Inc is tweaking...
  • iGaming growing in Asia, ops tackling challenges: Uplatform
    iGaming growing in Asia, ops tackling challenges: Uplatform

    Jun 01, 2023  

    The iGaming segment in Asia “has grown rapidly” since...
  • ‘See before you play’ slot marketing tool, say tech suppliers
    ‘See before you play’ slot marketing tool, say tech...

    May 31, 2023  

    Showing slot machine players – via animations on the...
  • Macau stocks tied to China outlook: Bloomberg analyst
    Macau stocks tied to China outlook: Bloomberg analyst

    May 31, 2023  

    Macau stocks in likelihood “have been punished too much...
  • Investors still eye possible fresh IR locations in Japan: scholar
    Investors still eye possible fresh IR locations in Japan:...

    May 31, 2023  

    There are foreign companies still interested in investing...
  • Thai casino law possible in 2024, IR in 2030: govt adviser
    Thai casino law possible in 2024, IR in 2030: govt adviser

    May 31, 2023  

    Thailand could pass the necessary enabling legislation for...
  • China still ‘critical’ to Asian markets: G2E Asia panel
    China still ‘critical’ to Asian markets: G2E Asia panel

    May 30, 2023  

    China will remain a key market for Asian gaming...
  • Much interest in state casinos sale, says Pagcor boss Tengco
    Much interest in state casinos sale, says Pagcor boss

    May 30, 2023  

    Alejandro Tengco (pictured in a file photo), chairman and...
  • Gaming industry in for a very exciting period: Bill Miller
    Gaming industry in for a very exciting period: Bill Miller

    May 30, 2023  

    There are “plenty of reasons” for the global gaming...
  • IGT flags route to high-performing games for Asia
    IGT flags route to high-performing games for Asia

    May 30, 2023  

    Gaming equipment provider International Game Technology Plc...
  • G2E Singapore trade show, conference begins today
    G2E Singapore trade show, conference begins today

    May 30, 2023  

    The Global Gaming Expo (G2E) Asia 2023 Special Edition:...
  • Novomatic’s Black Edition II cabinets at G2E in Singapore
    Novomatic’s Black Edition II cabinets at G2E in Singapore

    May 29, 2023  

    Austria-based gaming equipment maker and operator Novomatic...
  • Uplatform to show latest iGaming products at G2E Singapore
    Uplatform to show latest iGaming products at G2E Singapore

    May 25, 2023  

    Sports betting and online casino operating platform...
  • L&W ambition to be No1 in Asia well on its way: SVP gaming
    L&W ambition to be No1 in Asia well on its way: SVP...

    May 24, 2023  

    The business performance in Asia of gaming content and...
  • G2E Singapore expecting 6k visitors, 100+ exhibitors
    G2E Singapore expecting 6k visitors, 100+ exhibitors

    May 18, 2023  

    The organisers of Global Gaming Expo (G2E) Asia 2023...
  • ‘Dragon Unleashed’ slot link by L&W at G2E in Singapore
    ‘Dragon Unleashed’ slot link by L&W at G2E in...

    May 17, 2023  

    Gaming content and equipment supplier Light & Wonder...
  • Sega Sammy Creation new multi-ETG at G2E in Singapore
    Sega Sammy Creation new multi-ETG at G2E in Singapore

    May 16, 2023  

    Casino equipment maker Sega Sammy Creation Inc is to...
  • Aristocrat at G2E Asia in Singapore previews Year of Dragon
    Aristocrat at G2E Asia in Singapore previews Year of Dragon

    May 09, 2023  

    Casino slot machine and digital gaming content provider...
  • IGT ‘Prosperity’ link in Asia show debut G2E in Singapore
    IGT ‘Prosperity’ link in Asia show debut G2E in...

    May 05, 2023  

    The Global Gaming Expo (G2E) Asia event in Singapore is the...
  • Thai parliament adviser on casinos attending G2E Singapore
    Thai parliament adviser on casinos attending G2E Singapore

    May 04, 2023  

    An adviser to a Thailand parliamentary committee mulling...

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”We believe the intrinsic value of IGT’s market-leading businesses and diversified cash flow profile is not currently reflected in our stock price and the timing is right to assess opportunities that may enhance value for IGT’s shareholders”

Marco Sala

Executive chair of casino equipment supplier IGT



Most Popular

  • China Politburo meeting key for any policy shift: UBSChina Politburo meeting key for any policy shift: UBS June 7, 2023
  • Gaming-linked crime in Macau up 24pct y-o-y in 1Q: govtGaming-linked crime in Macau up 24pct y-o-y in 1Q: govt June 8, 2023
  • No Macau op yet asked GGR tax rate exemption: govtNo Macau op yet asked GGR tax rate exemption: govt June 9, 2023

Copyright 2014-2023 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us