Yesterday, Melco Crown Entertainment Ltd. said that converting Mocha Clubs Macau’s venues into non-smoking gaming parlors contributed to their overall fall in revenue for the fourth quarter of 2014.
Generally speaking, Mocha Clubs is a chain of parlors that feature slot machines and electronic table games across the administrative region, known to be Asia’s most popular gambling hub.
Ted Chan, COO of Melco Crown, pointed out in a special statement on the matter that Mocha Clubs marked a considerable decrease in revenue as compared to its rivals around Macau. The chain’s turnover dropped by 15% quarter-on-quarter and by 16% year-on-year. Mr. Chan also stated that the smoking ban is definitely posing serious risks to the business and attributed the decline to its implementation.
Mocha Clubs posted net revenue of US$32.8 million in the last quarter of 2014 as compared to US$38.5 million in the previous one.
Back in October, the government of Macau allowed the establishment of smoking lounges in four of Mocha Clubs’ venues. However, Melco Crown commented yesterday that smoking is not permitted in any of the chain’s parlors. The company did not say when and why the change had taken place.
Currently, smoking is allowed only in the areas intended for VIP players and only in case they are not located on the main floors of Macau’s casinos. In addition, mass market players can only smoke in special lounges that do not feature slot machines and gaming tables. As previously reported, a full smoking ban is likely to be implemented in the city sometime in 2016.
Last month, Karen Tang, a gaming analyst at Deutsche Bank AG, predicted that if smoking is fully prohibited in local gambling venues, this might result in a 15% decline in VIP gaming revenue.
Yesterday, Melco Crown released a report on its financial performance for the last quarter of 2014. The company stated that its net income for the afore-mentioned period amounted to US$1.12 billion, down by 20% as compared to the figures posted a year ago.
Lawrence Ho, chief executive and co-chairman of Melco Crown, shared with local media his comments on the pending full smoking ban. He said that they are really concerned about the potential turn of events. Mr. Ho pointed out that his company has always tried to respect its customer’s personal preferences and rights. He said that they are fully supportive of the establishment of smoking lounges, similar to those in airports.
Mr. Ho also claimed that the full smoking ban will certainly affect the growth of Macau’s gambling industry in the years to come.
