Casino News

Smoke Ban in Macau VIP rooms Brings Clarity to GGR

According to a newly revised bill on smoking in Macau casinos, there will be bans applied to tableside tobacco use in VIP rooms. This Friday saw the approval of the new bill which will allegedly eliminate “noise”, as the casino gross gaming revenue is classified and reported.

Analysts Carlos Santarelli and Danny Valoy from the brokerage Deutsche Bank Securities Inc. stated that even though the measure might seem like a stick in the wheel of progress of the gross gaming revenue, this will eventually prove to provide a new perspective on the gaming trends in the segment, as well as level the playing field across the various casino operators.

The new rules are supposed to become obligatory from the 1st of January, 2018, however, the casino venues have been granted an additional year to prepare their VIP smoking lounges. This means that smoking in VIP rooms will continue well into the year, until the 1st of January 2019.

There has been an interesting occurrence in the casino industry in Macau. The unique “table reclassification” has been going on for some time now and it manifests itself as having designated premium mass areas turned into VIP ones so that smoking in them could legally continue. Gaming Inspection and Coordination Bureau, also known by its acronym in Portuguese DICJ has a clear definition for a VIP room.

One is not defined by the presence of a rolling chip program, but instead by the number of tables available. Another crucial characteristic of a VIP room is the fact that it should be physically separate from the main gaming floor, in order to give its clients privacy and make the smoking in it possible. Smoking anywhere on the main floor mass tables and slots had already been banned. This practice of reclassification is about to come to an end, with the new rules for smoking on the premises of the casino venue.

It can be recalled, that smoking inside casino venues in Macau was first prohibited at the end of 2014, which left the mass gaming areas a smoke-free zone. This effectively attracted more customers which don’t enjoy the smoke when they are trying to have a good time, but VIP rooms remained a place where casino enthusiasts could smoke freely.

There is another issue, which has been noticed by experts. Reclassifications of this sort provide misleading trends regarding the segments of a casino. In the beginning of 2017 around US$700 million of mass revenue was listed as VIP revenue. Analysts say that January 2019 will bring more clarity and a meaningful revenue share opportunity for the rest of the participants at City of Dreams and Galaxy Cotai. Among them are Macau Ltd., China Holdings Ltd., Sands China Ltd.