Analysts confident total smoking ban won’t be enforced

The shift from VIP to mass market and improved transport infrastructure will be the catalysts behind growth rejuvenation in 2016, say analysts. The city’s 9.6 per cent decline year-on-year for the month of May in gross gaming revenue to MOP18.4 billion (US$2.3 billion) exceeded estimates by Wells Fargo and Bernstein, which estimated a drop of between 6 and 8 per cent. However, even with the registered decrease the average daily revenue (ADR) for May – MOP593 million – was 3 per cent higher than the registered April ADR of MOP578 million, according to Bernstein. Gross gaming revenue data was published on Wednesday by the Gaming Inspection and Co-ordination Bureau (DICJ). The decrease wasn’t only restricted to GGR, as the sale of watches, clocks and jewellery continues its decline, running for the ‘8th straight quarter’ since the end of 2014, with volume of retail sales decreasing by 8.7 per cent year-on-year for the month, the Bernstein report said. Nevertheless, Wells Fargo expects gaming revenue in June to see a 1 per cent to 7 per cent growth through the month, estimating daily revenues of ‘roughly MOP540 million to 570 million,’ while analysts’ general consensus estimate a 3.7 per cent growth year-on-year. ‘Due to improvements in transportation infrastructure and the opening of large scale integrated resorts between 2015-2018, mass will be the driver of rejuvenated growth beginning in 2016 and continuing through the rest of the decade,’ Bernstein stated in its May report. Smoking ban not expected soon Bernstein analysts believe there is ‘limited risk of implementing a full smoking ban in the medium term,’ as most of the members of the Legislative Assembly committee in charge of assessing a revised tobacco control bill oppose a full smoking ban in casinos. The report states how the local government seemed to have ‘relaxed its resolute tone’ on a total smoking ban proposed last year on VIP rooms, while eliminating smoking lounges on mass gaming floors, having decided now to ‘keep an open mind on whether casinos can retain smoking lounges, including in VIP rooms,’ the report states. Non-resident hiring blues The analyst firm has registered difficulties by gaming operators trying to get ‘large scale foreign labour quotas approved’, mentioning difficulties by Wynn Palace to obtain Wynn’s temporary work permits (blue cards] for housekeeping staff at the developing Wynn Palace project, planned to open in early August. The increased difficulty in blue card renewal applications for management level was also referred to, as Macau’s Human Resource Office enforces a policy tightening the blue card renewal process for foreign casino managers as a way to make more managerial positions available for local workers and help promote local workers to higher positions. Currently, Macau locals account for ‘well over 80 per cent of managerial positions, 77 per cent of all workers at casino properties, and 96 per cent of casino-specific employees’, the Bernstein data reveals.