Scientific Game

Kind to be Cruel?

Macau’s anti-smoking proposals for casinos

Tuesday, 01 March 2011 16:36
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The Macau government and lawmakers probably thought they were being kind to casino operators by agreeing to only a limited smoking ban on the territory’s casino floors.

Under the tobacco control law submitted in draft form to Macau’s Legislative Assembly, bars, dance halls and saunas will have three years to implement a total smoking ban, but casinos will only be required to set up partial smoking bans within one year of the law coming into force. Under the bill, up to 50% of casino floors can remain smoker-friendly.

In reality, it might have been kinder for the government to be cruel and go for a total smoking ban in casinos on the same three-year timetable as bars, or at least insist on a minority area for smokers. That’s because a 50:50 split on the floor could be a marketing and logistical nightmare for casino operators.

Because 85% of Macau’s gaming revenue is from live baccarat, the quickest fix would probably be for casinos to keep all the live table baccarat areas as smoking zones and limit the no smoking zones to the slots and other table games. But that rather defeats the object of protecting the health and comfort of non-smokers who also happen to be baccarat players. It would also be a significant attack on the rights for the slot and multi-terminal suppliers to be given a fair shake on the floor.

And because the Macau government has indicated it expects partitions to be set up between smoking and non-smoking zones, a 50:50 split on the floor would not only look ugly but also significantly reduce the mousetrap effect that helps to keep people playing and spending money in a property.

Under the draft legislation, an operator is not obliged to exercise the right to have up to 50% of the space for smokers. The operator could even choose to go smoke free. But in such a fiercely competitive market, with so many customers from mainland China who are smokers, it would take a brave management to risk affecting the bottom line with an act of public altruism.

Even if the floor were effectively to be split down the middle with a mix of games in both areas reflecting the general tastes of the Macau players; that still potentially creates significant challenges and cost implications for the operators. Arguably such a scenario would boost the case for server-based slot gaming in Macau. If it does turn out that smokers have different slot game and slot play preferences to non-smokers, it would be a lot easier for casinos to respond to that player demand by removing or installing a game remotely down a wire, than to physically move cabinets around between smoking and non-smoking areas or install new games on the floor by hand.

Secondly, the social engineering of a Macau government policy on smoking won’t have an overnight impact on the tobacco consumption habits of the one third of Chinese adults who smoke. According to a report published last August in the English-language version of People’s Daily, 53% of adult males in China smoke, as do 50% of medical doctors in China. With the massed ranks of Macau’s smoking gamblers squeezed into half the floor area instead of spread around the whole floor, then the smoking zone must inevitably become ‘smokier’ than before (even when high quality modern ventilation systems are used to clean the air). That in itself could create greater incentives for the non-smokers to stay out of the new smoking areas than under the current ‘mixed use’ arrangements.

There’s a third problem. If the floor is split 50:50, where is the smoking zone going to be? In the very centre of the floor? If not, then either non-smokers will need to walk through it (which rather defeats the object) or no-smoking ‘corridors’ will need to be built from the main entrance nearest to the smoking zone through to the smoke free area, in the manner of the connecting corridors at The Venetian Macau that allow families with children to walk around the property without entering the gaming area.

If governments in Macau and Hong Kong were really acting in good faith toward smokers and non-smokers alike, rather than acting like busybody nannies, they would have allowed the sale and marketing to Hong Kong residents and Macau gamblers of smokeless ‘electronic’ cigarettes (known as eCigarettes). But the Hong Kong government banned the importation and sale of the devices, driven by fear of a collapse in tax revenue from conventional cigarettes and perhaps more importantly because they were lobbied hard by the commercial interests that run Hong Kong and that have the exclusive rights to import leading brands of cigarettes. That also seems to have killed off the product in the Macau market.

Macau seems willing to take a leap in the dark with a halfway house policy on smoking that is born of opposing objectives. The first of those objectives is for Macau to be seen to be conforming to the international standards on public smoking seen in many developed economies. The second is to be seen as responsive and supportive of its core industry, casino gaming. In the end, it risks pleasing neither one side nor the other.

Singapore has shown clearer leadership on this issue. The presumption of rights in the integrated resorts there is against the smokers. Resorts World Sentosa has a larger amount of space designated for smokers than Marina Bay Sands, but in both cases the smokers are catered for as a minority group, and their allocation of space is measured accordingly. A similar principle is applied in most developed countries in public spaces such as airports and offices, where smoking rooms or zones are sealed off from the ‘majority’ public areas.

In casino-free Hong Kong, where public smoking was banned in January 2007, some bars, karaoke parlours, saunas and nightclubs were given until July 2009 to implement the new rules. Many European Union countries have also passed anti public smoking laws on the presumption that the right of non-smokers to breathe smoke-free air outweighs the right of smokers to pursue their habit. Not all developed countries take the same view.

In the United States, where the constitution and political tradition strongly support the rights of the individual, there is no national ban on public smoking—though some individual states have passed laws to control it; in likelihood as a defensive posture by public bodies against litigation from private individuals or from class actions. In Nevada, however, attempts to introduce a smoking ban in casinos have so far been resisted.

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