CASINO

Macau casino operator stocks gain on suggestion of smoking ban wiggle room

TAGs: Macau, smoking ban

macau-casino-smoking-ban-wiggle-roomCasino operators with properties in Macau are seeing share price rises after a top legislator suggested a compromise on the city-state’s proposed blanket smoking ban.

Last week saw Macau’s Legislative Assembly (LA) have its first reading of the new smoking plan, which would ban tobacco use in casino VIP rooms and eliminate the airport-style smoking lounges on the mass gaming floors. Following the reading, the LA voted 26-2 in favor of the plan, sending the bill to a committee for further study and recommendation ahead of a second and final vote later this year.

Following the vote, Secretary for Social Affairs and Culture Alexis Tam Chong Weng dismissed suggestions that the government might permit the smoking lounges to remain, saying the government had “a very firm stance on this matter and our intention is to protect the health of Macau’s population.”

However, Tam has since offered hope that the smoking lounges could be preserved if operators could provide evidence that smoking lounges “can scientifically and effectively prevent the health of gaming workers and tourists being affected by tobacco.” Tam suggested that the LA’s final verdict “will depend upon [the operators’] proposals.”

Tam said the government’s top priority was preserving the health of the casino industry’s frontline workers. That said, Tam said the LA members “totally understand [operators’] situation and concerns. As such, we will see if their proposals really are viable.”

LA member Angela Leong On Kei, who is also a top executive in Macau casino operator SJM Holdings, believes such proposals have merit. Leong noted that Macau operators had “invested heavily” in setting up their smoking lounges just one year ago and had done so with the express approval of Macau’s government. Leong suggested that if the government found fault with the current situation, then “other solutions can be found.”

The possibility of wiggle room on the smoking issue was music to the ears of casino investors, who pushed MGM China up nearly 7% on Monday, while both Sands China and Wynn Resorts were up nearly 5%.

However, a relaxation of the smoking lounge policy wouldn’t affect VIP gaming rooms, so Macau’s junket operators are still crying foul. On Sunday, the president of the Macau Junket Operators Association warned that his group’s members would accelerate their expansion outside Macau unless there was a rethink on the VIP smoking ban.

The Macau Responsible Gaming Association voiced similar concerns. Association director Song Vai Kit insisted that VIP room staffers’ lungs could be protected through modification to VIP room infrastructure, including the use of “dividing panels” as well as “independent ventilation and independent air conditioning systems.”

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