Macau: Weak start for April; smoking ban update

Macau has had a weak start to April, with GGR reported at MOP 5.5 billion (US$688.7 million) from April 1 – 10, according to a note from Bernstein.

ADR was weaker than expected, especially given that two weekends fell within the period, said the brokerage. Assuming an ADR of MOP 550 million, which compares to MOP 580 million in March and MOP 673 million in February, Bernstein estimates April GGR to be MOP 16.5 – 17.1 billion, representing a decline of 11-14 percent.

With regards to Macau’s full smoking ban, which will include banning smoking in VIP rooms and smoking lounges on mass floors, Bernstein quotes local media, who says there is no certain date for a final vote just yet.

A recent customer survey conducted by Bernstein indicated that the ban may not have as strong of an impact as expected. The survey, which was conducted with approximately 1200 Chinese gaming visitors to Macau, showed that nearly 50 percent of visitors claimed not to smoke at all, and 23 percent do not smoke at gaming tables or rarely.

“As such, although an expanded smoking ban may have some negative impact on GGR, the magnitude of such impact would likely not be significant,” said Bernstein’s analysts.

“We believe the key would be for the government to allow sufficient lead time for casinos to adjust for the policy change, which may include installation of smoking balconies if feasible and routing to outdoor areas, as well as communicating with customers about the change. Given the recent development in Macau gaming market and government policy direction, we believe there is limited risk of implementing a full smoking ban in the near term,“ the note added.