Inside Asian Gaming

July 2014 inside asian gaming 17 in June. But analysts do not uniformly share this perspective and are keeping a close eye on developments, especially on whether all the tables in the premium-mass segment can fit into the statutory requirements of private gaming areas in time to avoid going smoke-free. Premium-mass gamblers have become a prime focus for Macau’s casinos because they play at higher bets than the mass average and yield higher profit margins for operators, which do not have to pay junkets commissions as they do in VIP. A guideline dated 23rd June released by the local gaming regulator, the Gaming Inspection and Coordination Bureau, has laid down for the first time official definitions of mass floors and VIP floors, or in government’s terms, public gaming areas and gaming areas with limited access for gamblers. The private gaming floors must be “independent rooms” or “spaces well-separated by physical and architectural barriers” from the main floors, the guideline says. Only gamblers with membership cards may access the private floors, which can be run by either licensed gaming promoters or the casinos. “As of this instant, not all premium mass tables in Macau would fit within the new guidelines; in fact, quite a large amount would not. This is due to many premium mass tables not being 100% physically separated and/or having ventilation systems,” said analyst Grant Govertsen of Union Gaming Research Macau. “However, I believe In Focus “However, I believe that all operators have enough time (three months as of now) to reconfigure their casino floors so that premium mass fits within the new requirements.” Grant Govertsen | Union Gaming Research Macau that all operators have enough time (three months as of now) to reconfigure their casino floors so that premium mass fits within the new requirements.” Before the publication of the definitions analyst Karen Tang of Deustche Bank Research already noted in a gaming report on 30th June: “We believe premium mass lounges can still allow smoking as long as the casinos pay VIP table tax (MOP300k/year vs mass table tax of MOP150k/year), and build walls around to make premium mass ‘separate rooms’.” Ms Tang believes the smoking ban will drag down mass revenue by only 3-5%, or 1-2% in terms of overall casino revenues, as there is a “lack of alternative gaming venues”. In a slightly gloomier tone, Morgan Stanley analysts Praveen Choudhary, Alex Poon and Thomas Allen said in a June report, “Based on US, UK and Australia, revenue could drop by 5-15% in the first year and could recover eventually. “We believe a full smoking ban in the mass area could move some of the customers to VIP rooms and thus drive margins lower for the operators, but could [raise] VIP revenue growth estimates,” they added. However, workers and the labor unions vow to keep a close eye on the casinos and the progress of the October ban. “The government’s policies are still formulated behind closed doors with its business friends. It should implement a full smoking ban in casinos to safeguard the workers’ health,” said Gaming Industry Workers Association Vice President Leong Sun Iok. “The government’s policies are still formulated behind closed-door with its business friends. It should implement a full smoking ban in casinos to safeguard the workers’ health.” Leong Sun Iok Gaming Industry Workers Association Vice President