Non-smoking Policy Chokes Macau's Casino

Smoking Complements Gambling

The Ravel Casino in Atlantic City did not believe that smoking is a complimentary product for gambling. Macau is following this footstep to put test this consumer preference theory. Market Watch warns investors in their 3 Oct 2014 report that strict curbs on smoking laid out in a recent statement by Macau's government information bureau will have a negative impact on share prices for casinos in Macau.

No Smoking Ruling

This recent announcement would completely ban all smoking in "mass areas," although some VIP lounges will still allow it. According to Barclays Research's latest forecasts the smoking rules are stricter than most economists had expected. Barclay initially interpreted the ruling to allow smoking at partitioned premium mass areas on the mass floor. "While previously we had expected just a low-to-mid-single-digit percentage impact to overall gross gaming revenue from the smoking ban (if premium mass areas can still smoke), we would now expect a higher mid-to-high-single-digit impact to overall Gross Gaming Revenue if smoking is not allowed in all premium mass areas as well," the firm said.

The Ravel Story

The Revel Casino opened in April 2012 and had struggled since it started operations. It started out by trying to achieve its niche market by branding itself as an upmarket resort-class casino. This posh concept of no smoking, expensive food and drinks did not appeal to the typical gambling crowd of Atlantic City. The $2.4 billion resort suffered badly from poor patronage. After operating for 10 months, it incurred a debt of $1.5 billion. It filed for bankruptcy on March 2013. In May 2013 the casino got out of bankruptcy by clearing the $1.2 billion debt in exchange for an 82% equity to its lenders. It is unfortunate that Macau had not learned from Ravel.

Carpe Diem: Seize the Day: States Use Gambling to Save Economy

REBLOG> Carpe Diem: Seize the Day: States Use Gambling to Save Economy:
Phil Andows' Original Blog

---

Gambling Addiction

Policymakers in USA is starting to see gambling as a panacea to be the cure for all economic ills but gambling addiction it the ugly side of the coin. USA Today is in the view that gambling states are addicted to easy money in its report dated 25 Sep 2014. The Editorial Board cited New Jersey are the prime example of the worst offenders in the world of gambling. "They are both addicts and pushers. They throw temper tantrums and upset settled policy when their fix of gambling revenue runs low."

Save the Economy

New Jersey began offering online gambling last year to bring in more tax revenue as Atlantic City casino revenue took a sharp dive. Since the revenue from the online gambling was not much of a help, the state will come up with more gambling products. Governor Chris Christie has given the green light for casinos and racetracks to offer sports betting. A federal judge will hear Christie's argument on Oct 6 as a 1992 federal law banned the practice in all but four states where it previously existed.

Gambling Expanded Widely

The good days are gone. Christie can't expect gambling to be the savior. New Jersey is no longer the gambling mecca of the East Coast. Adjoining states - Maryland, Pennsylvania, New York and Delaware - have all opened casinos recently. As of 2012, America had 513 state-licensed casinos, plus 466 on tribal lands. With more players, it is obviously going to be less share for the same pie.

Gambling Destroys Lives

There is a deadly social cost for gambling. Compulsive gambling habits from 1% to 2% of gamblers are known to destroy lives. People lose their jobs, families and self-confidence due to heavy losses. A study done by Baylor University in 2011 estimated the cost of gambling ill at $9,393 per compulsive gambler per year. The state should explore alternatives instead of always relying on gambling to bail them out.

---

Veronica Glowsome Commented

It is like a gambit in chess. A small piece is sacrificed to gain advantage. The gambit here is 1% to 2% of gamblers who will turn into rotten gamblers.

My Comments

To optimizing grievances, the government must see all scenarios.

Anything Under the Sun: China Corruption Blitz Hits Macau Junkets

REBLOG> Anything Under the Sun: China Corruption Blitz Hits Macau Junkets:
SavySeph's Original Blog

---

Laundering Money

Rotten gamblers, especially the whale bettors, could be mistaken for money laundering. This may be the assumption of Chinese President, Xi Jinpin. His crackdown on corrupt officials and tycoons is starting to drain China. This almost 2 years blitz had caused the sale of luxury good to dwindle and the VIP rooms at Macau casinos to slow down. It had driven rotten gamblers to other gambling destinations. This is like sending away the goose that laid the golden egg to your fellow neighbors. The claim of coming by a windfall from the casino is not that easy to justify with the generous amount of surveillance camera covering the casino. Coming up with the bankroll to make the amass the extraordinary win would be a great question mark.

Macau's Casino Junket Squeeze

The prolonged crackdown is now starting to squeeze the junkets in Macau. As the Chinese economy dragged its feet, the whale gamblers shy away. In Macau, whale gamblers will punt HK$1 million without second thoughts. Junkets who lend them money and settle their debts are not longer as flexible as debt recovery is not as easy. Authorities are digging junkets for information on Junkets are had left the industry. Chinese officials suspected of corruption who may be laundering money through Macau. The pressure is too much that, "I can't sleep at night. There are just too many problems," said one 54-year-old junket operator who didn't want to be named because of the sensitivity of the issue. "I'm not optimistic for the future of the VIP junket industry here." Of Macau's 220 licensed junket firms, at least 15 have shut up shop in the big casinos this year the Reuters reported on 24 Sep 2014.

---

My Comments

China's government had always portrayed they will not compromise in the pursuit of their policy. The blitz will continue at the expanse of a shattered Macau's economy.

Pest in Midst: Laggard to the Casino Industry

REBLOG> Pest in Midst: Laggard to the Casino Industry:
XingCai's Original Blog

---

Casino Industry in Asia

Singapore is considered a laggard to the casino industry in comparison to her neighbor, Malaysia. To make up for being half-a-century late Singapore decided to have two casinos. Other Asian countries - Vietnam, Korea, Sri Lanka, Cambodia and Japan - are joining the bandwagon to intensify the fight for gamblers patronage. Like good foodies, gamblers will travel the extra mile for a wager.

The Singaporean Stunted Growth

Macquarie, a leading financial services provider in Australia, "think the Singapore gaming market cannot grow." They noted that the gross gaming revenue (GGR) for the nation had plateau around $6 billion a year since 2011. "After three big years, tourist arrivals in Singapore have started to decline (down 3 percent year-to-July) and most importantly, Chinese visitors who form more than 50 percent of Singapore VIP volume have fallen by 29 percent year-to-date," Macquarie said. VIP volumes make up around 80 percent of the city-state's total gaming volume, it said [CNBC 23 Sep 2014].

Singaporean Senseless Optimism

Carey Wong, an analyst at OCBC, is optimistic about the situation. He sees the drop in overseas visitors to be temporary as it is partly due to China's economic slowdown and corruption crackdown. He said, "Once things die down, we'll see the return of these high rollers," he said. "From an Asian perspective, Asians will gamble regardless of good times or bad. It's different from a Western perspective, where gaming is more for leisure." Wong does not seem to make much sense when he claimed that economic slowdown was the cause of decline in Chinese visitors yet advocating that bad times will not stop Asian gamblers. Singapore's strong currency and lack of tourist attraction in their tiny island is more likely the cause for their failure to attract foreigners.

---

My Comments

The OCBC analyst contradicts himself. I guess he is carrying a Singaporean invincible arrogant in his mouth. But seriously he talks through his ass.