Macau smoking ban to have minimal impact, analysts say

Following the announcement that a full smoking ban in mass gaming areas is to be implemented from October 6th, Sterne Agee says in a note that it believes the impact will be negligible. In the worst-case scenario it may lead to an overall drop of 10 percent in mass GGR, and sector revenue and EBITDA may fall by 3 percent and 6 percent respectively, it said. Macau will implement a full smoking ban for all mass market areas, after the Golden Week holidays, though VIP rooms and enclosed premium mass market areas are unlikely to be affected, according to analysts. Casinos will be able to set up non-gaming smoking rooms, with full ventilation so players do not have too far to walk. Goldman Sachs points out that a full smoking ban implemented in Australia and the U.S. cut GGR by between 5 to 16 percent, though the impact in Macau may be less drastic as players tend to be more hard core gamblers. The ban may also create a more level playing field between smaller casinos, such as SJM Holdings’ Grand Lisboa and larger rivals, such as Sands China’s The Venetian, Goldman said.