Local media are reporting that a proposed smoking ban could effect about half of all junket employee’s jobs. There are 3,000 to 5,000 junket employees in Macau servicing over 170 VIP gaming promoters. Mr. Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters of Macau, and an independent non-executive director of Jimei International, was widely quoted in the articles.

The government has said that a new smoking control policy would be implemented by next year. The policy would not only limit and restrict areas where smoking is permitted, but levy new taxes and ban electronic cigarette sales. Increased fines are included as well as bolstering the enforcement staff from 40 to 60.

Macau’s Executive Council on Tuesday sent a bill to the Legislative Assembly to amend the current smoking control policy. The bill would ban any smoking on mass and VIP gaming floors and eliminate smoking lounges on mass gaming floors throughout the district. There is no indication at this time that the bill has been placed on the Legislative Assembly calendar for discussion. To date the Legislative Assembly has never rejected a bill from the Executive Council, but amendments have been made.

VIP promoters would like to see a carve-out for smoking lounges on their gaming floors. It is expected that somewhere between 600-1,000 of the roughly 2,000 gaming tables currently in use by junket operators could be taken out of operation and returned the concessionaires for use in mass gaming halls if the bill is adopted as delivered.

Another overall reduction of gaming revenue is expected if the policy is passed as currently discussed. Gross gaming revenue has already fallen for 13 straight months in Macau. The move could reduce city-wide gross gaming revenue by 25% based on half of all revenues coming from VIP operations and a halving of those numbers.

Year over year Macau gross gaming revenue fell over 36% in June. Austerity measures may be implemented by the government if certain thresholds are reached, such as the MOP18.35 billion floor set for July. Secretary for Economy and Finance Lionel Leong has stated that he doesn’t believe those numbers will occur for this month as June numbers showed less of a decline compared to May than in previous years. 2015 June revenue showed a 14.7% decline. The largest decline in the last five years was of 26% May to June, giving some hope for this month’s numbers.

 

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