Macau casino junkets warn of carnage if full smoking ban goes ahead

TAGs: junket operators, Macau, smoking ban

macau-smoking-ban-junketsMacau casino junket investor Iao Kun Group Holdings Ltd. (IKGH) says it would like a do-over for the first six months of 2015.

IKGH, which has a profit share in five Macau casino VIP gaming rooms, says rolling chip turnover was $3.92b in H1 2015, representing a 58% decline over the same period last year. Figures for the month of June were even worse, falling 60% to $540k. Worse still, win rate for the month was 2.5%, below the theoretical range of 2.7% to 3%.

Macau’s beleaguered junket operators are bearing the brunt of the gaming hub’s 13-months-and-counting revenue decline, which is largely a result of decreased VIP activity. Junket operators are now bracing for yet another kick to the goolies as Macau’s government preps the first reading and debate of its new full smoking ban legislation on Thursday (9).

Deutsche Bank has suggested the proposed smoking ban – which would eliminate previous exemptions for VIP rooms and airport-style smoking lounges on the mass gaming floor – could trim $3.4b off 2016’s gaming revenue total if it takes effect in January as suggested.

An industry group representing Macau’s junket operators has issued its own warning, saying a blanket smoking ban threatens the jobs of many of the estimated 3k to 5k employees currently working for the city’s 178 VIP gaming promoters.

The Association of Gaming and Entertainment Promoters of Macau – whose members include SunCity Group, Jimei International Entertainment Group, Tak Chun and others — recently took out a full page ad in the Macao Daily arguing that the government was proceeding with both undue haste and insufficient study of what a blanket ban will mean for the casino industry.

The junket’s op-ed reiterated its plea to maintain the VIP and smoking lounge exemptions, claiming that the independent ventilation systems attached to these areas were sufficient to ward off the damages of second-hand smoke.

The op-ed also suggested that if the government chose to apply an “absolute standard” to all theoretical harms, “then it should also ban all food additives, as well as prohibiting vehicles from emitting waste gas so that the health of residents can be effectively protected.” Snark will get you nowhere, fellas…


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