Can Smoke-Free Casinos Still Cash In?

The boom times are over in Macau. The Chinese gambling hub's gross domestic product plunged a horrifying 17.2 percent in the fourth quarter, and the government has curbed its projected casino revenue for the year by 27 percent. China's slowing economy and the government's anticorruption campaign are largely being blamed for fewer big spenders hitting the casinos. But there's another factor contributing to the woes of casino operators such as Sands China and Wynn Macau: a ban on smoking on the main floors of Macau casinos.

The policy took effect last October, and it's leading some casino guests to go outdoors to light up. For casino operators, that lost playing time "is crucial," says Tim Craighead, an analyst in Hong Kong with Bloomberg Intelligence. "If I have to get off the table every hour to smoke a cigarette, that's 20 percent of the time I would be playing that I'm not." For now, the restriction on cigarette smoking is limited to the main gaming floors, with people still allowed to light up in VIP rooms and smoking lounges. The government is readying a proposal for lawmakers to implement a complete ban next year.