The Macau Metro Monitor, December 26, 2012




According to Macau Health Bureau director Lei Chin Ion, the partial smoking ban on casino floors will take effect next week, even though some casinos will not be ready on time.  Lei says there would be “no room for exercising discretion or another grace period” for enforcing the partial smoking ban in casinos.  If a casino fails to get its project on smoking areas approved by the government by the deadline of January 1, it will be considered a full non-smoking area.


He pointed out that the bureau has already received requests for approval from all six gaming operators and is now conducting site inspections.  Lei added that he is confident that the bureau would conclude all the proceedings on time.



China has opened the world's longest high-speed rail line, which runs 2,298 kilometres (1,428 miles) from the country's capital in the north to Guangzhou.  Trains on this high-speed line will initially run at 300 kph (186 mph) with a total travel time of about eight hours.  Before, the fastest time between the two cities by train was more than 20 hours.  Railway is an essential part in China's transportation system, and its government plans to build a grid of high-speed railways with four east-west lines and four north-south lines by 2020.



85% of gamblers in Macau are reckoned to be smokers - representing the upper estimate by the casino operators.  The 50% floor space rule presents casinos with a clear choice: they will not ban smoking in any of the VIP rooms because they cannot afford to annoy the high-rolling smokers.  By taking that decision, and using their quota of smoking area on the VIPs, most casinos will end up having to have total bans on their mass gaming floors.  When American and Australian casinos enacted such bans, gaming revenue fell by an average of 12% in the first year, and that was in countries where only about a third of gamblers smoked.



China's new leaders have come out swinging against official excess and corruption. Expensive banqueting and lavish overseas trips are out. Clean living and austerity are in. Some senior officials are under investigation. The antigraft dragnet could catch more than just corrupt cadres.


Luxury retailers have benefited from the inflated incomes and gifting culture of China's officials.  It is difficult to say how much luxury spending is tied to corruption. But a recent Bain survey found about a quarter of all luxury goods are purchased for gifting.  Foreign auto makers that sell to the official fleet or cater to China's princeling set could also be affected. The likes of Audi and Ferrari now count China's wealthiest class as key customers, including bureaucrats, business owners and their offspring.  Macau's gambling sector could also suffer.


It is difficult to know how effective the new leadership will be with efforts to clean house.  Hu Jintao has railed against corruption for years to little apparent effect.  Rule changes that would force officials to disclose their assets and subjecting party members to the law would help.  But antigraft rhetoric without a change in the rules will likely have little permanent effect.  Still, corruption and excess have been important components of revenue growth for some sectors. If Beijing gets serious about stamping it out, the impact will be meaningful.



Macau unemployment rate (1.9%) and the underemployment rate (0.8%) for September-November 2012 held stable as the previous period (August-October).  Total labor force was 356,200 and the labor force participation rate stood at 72.5%.  Total employment reached 349,600, an increase of 2,900 over the previous period. 

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