Casino Stocks Smoking

Shares for Wynn Macau Ltd. alone rose 5.7 percent to their highest price in two months, while those for Galaxy Entertainment and Sands China went up 4.7 percent. Perhaps spooked by the fact that casinos have been doing poorly over the past 12 months after Chinese authorities launched a corruption crackdown that sent high-rollers from outside the Macau resort area to other casinos, the government announced that its proposed universal smoking ban might be eased.

The ban was seen as a potential drag on revenues. At present, smokers can light up only in airport-style smoking lounges situated throughout the gaming floors. The new ban would eliminate the lounges and prohibit smoking in VIP rooms. The ban will be canceled if casinos can prove to the authorities that “the health of employees and patrons” is being protected, according to the Secretary of Social Affairs and Culture Alexis Tam Chon Weng.

Gross revenue for gambling in the region fell by 36 percent in June from a year earlier, the lowest level in more than four years. Deutsche Bank AG estimated that trips to Macau by high-stakes gamblers would drop by 17 percent if the smoking ban were implemented, citing a third party study commissioned by six of the city’s casino operators.