Macau losing Money due to Smoking Ban while Singapore profits

2015 has definitely not been Macau’s year, and it only seems to be getting worse thanks to a smoking ban in the casino mecca.

Smoking has been prohibited on Macau casino floors for a year now, with the exception of designated areas where smokers can light up. There’s little doubt that the situation has contributed to falling Macau revenue, which has dropped 37% throughout the first eight months of this year when compared to 2014.

Meanwhile, Singapore has become a casino haven for smokers because there are no limitations in the city state. In fact, as Bloomberg reports, waitresses sell packs of cigarettes to gamblers while they’re at tables or on slot machines.

Further trouble could be ahead for Macau with regard to the smoking issue. Legislators are currently discussing a bill that would prohibit smoking across all 35 casinos in China’s special istrative region. The idea is to promote public health and make Macau a more-family friendly destination; the reality is that it could further hurt their bottom line.

“A full smoking ban will have a disastrous impact on Macau and VIP operators,” said Kwok Chi Chung, who heads Macau’s Association of Gaming & Entertainment Promoters. “It’s like adding hail to snow.”

Kwok’s group leads the junket operators who bring Chinese high rollers to Macau and have helped make the gambling city a fortune. However, if a full smoking ban is added, he believes that it would cause another 30% revenue drop for the place. Meanwhile, other Asian gambling hubs like Singapore, Malaysia, Manila and South Korea would likely experience a big jump.

Macau is already dealing with the government’s anti-corruption campaign, which has targeted high rollers who may be laundering money in Macau. Furthermore, certain city officials have also entered the picture while being blamed for taking bribes and adding to the corruption.

All of this has helped drop Macau casino revenue from a record haul of $44 billion in 2014, to what should be more around $30 billion when 2015 is over with.

The idea is to think long term and create a resort economy that doesn’t rely so much on gambling. And a smoking ban could help out with this, considering that a University of Wisconsin in Milwaukee study shows non-smokers and former smokers would be more likely to visit. But in the short term, prohibiting cigarettes in casinos will cause lower earnings for Macau.