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Macau gov't will look to delay smoking ban decision, says Bernstein

Bernstein Research estimates a decision on the smoking ban will take longer than two months indicated by recent news reports, as the government looks to buy time amid weakness in the gaming industry.

Following last week’s meeting between the six gaming concessionaires and the Macau Legislative Assembly's Second Standing Committee, which is tasked with modifying the government's smoking ban proposal, Bernstein says the government will “be loath to make a decision while the gaming industry is still weak.”

The chairman of the committee, Chan Chak Mok, had previously indicated that it may take until June 2016 for the bill to return to the full Assembly after a series of consultations and potential significant amendments to the original bill. 

Smoking is currently allowed in areas classified as VIP and in airport-style smoking lounges located on the Mass casino floors. The proposed changes to the bill would see smoking completely banned throughout casinos.

The Macau government has, since initial passage of the smoking bill in July, made comments about being flexible on potentially allowing smoking lounges and smoking in VIP rooms to remain. 

The government had conceded that smoking lounges in casinos may be retained if the operators can scientifically prove that the lounges could effectively prevent tobacco harm. 

“We believe the impact of a full smoking ban (including elimination of smoking lounges) is already priced in the current valuation. A retention of the lounges and the smoking VIP rooms would be a positive catalyst.”

“If a full smoking ban were implemented, it would have negative impact on GGR, as the current partial smoking ban has had negative impact on Mass GGR since October 2014,” Bernstein says.


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