Smoking lounges could stem potential GDP decline: KPMG

Monday 23rd of November 2015

If smoking lounges in Macau casinos are retained the city’s GDP may only decrease by 0.71 percent compared with a potential decline of 16 percent if a full smoking ban is implemented, according to a recently released study by KPMG.

KPMG said it evaluated the impact on Macau GDP based on the survey findings of gaming patrons on how their spending behaviours would change following a change in smoking policy.

Two scenarios have been envisaged: a full smoking ban and the retention of smoking lounges.

“If a full smoking ban is introduced in Macau casinos, Macau GDP may decrease by 16%, majority of the loss comes from the direct gaming tax loss by Macau government. Among the loss, government tax revenue loss and salary loss represented an aggregated loss of 9.7%, contributing to 60.6% of GDP loss.”

“This could affect the ability of job creations for the Macau businesses. Macau government treasury income could also be affected due to the loss in tax revenue.”

If however, smoking lounges are retained, “Macau GDP may only decrease by 0.71%, less than 1%.”

Earlier this month, Macau’s six casino operators met with the Second Standing Committee of the Legislative Assembly to jointly present their views on the proposed smoking regulations along with the comprehensive data from the study.

The six casino operators voiced their full support for the government's smoking control measures due to the positive health benefits it will have on the public and staff.

“However, the group believes that maintaining well-constructed and independently-ventilated smoking lounges in casinos could be an alternative to a full smoking ban,” the companies said in a joint statement.