Macau casino junkets warn of carnage if full smoking ban goes ahead

Macau casino junket investor Iao Kun Group Holdings Ltd. (IKGH) says it would like a do-over for the first six months of 2015.

IKGH, which has a profit share in five Macau casino VIP gaming rooms, says rolling chip turnover was $3.92b in H1 2015, representing a 58% decline over the same period last year. Figures for the month of June were even worse, falling 60% to $540k. Worse still, win rate for the month was 2.5%, below the theoretical range of 2.7% to 3%.

Macau’s beleaguered junket operators are bearing the brunt of the gaming hub’s 13-months-and-counting revenue decline, which is largely a result of decreased VIP activity. Junket operators are now bracing for yet another kick to the goolies as Macau’s government preps the first reading and debate of its new full smoking ban legislation on Thursday (9).

Deutsche Bank has suggested the proposed smoking ban – which would eliminate previous exemptions for VIP rooms and airport-style smoking lounges on the mass gaming floor – could trim $3.4b off 2016’s gaming revenue total if it takes effect in January as suggested.