Gaming Gaming insights

Smoke free gaming: perplexities and loopholes

This article first appeared in the Jul/Aug 2013 issue of World Gaming magazine.

It is with great pleasure that WGM announces the addition of esteemed Macau lawyer Luís Mesquita de Melo to our list of regular contributors. Luís has over 23 years experience in a broad range of legal roles, from University lecturer to senior Government advisor, senior corporate executive and working in private practice. Luís was formerly Executive Vice-President, General Counsel and Joint Company Secretary for Sands China Ltd. He has a unique set of skills and experience covering a wide range of legal matters related to gaming and hospitality, corporate law, banking and finance, listing rules and general commercial and business development matters. WGM is very lucky to have Luís as one of our regular contributors, which provides us access to his vast experience, insightful analysis and legal opinions. Welcome aboard, Luís!

Andrew W Scott, WGM CEO

More and more countries are implementing smoking bans, including in their casinos. France, Belgium and Switzerland are just a few examples. Interestingly enough, in some places known for their intolerance towards smoking in public places (such as Las Vegas and Atlantic City), casino floors remain smoker-friendly venues. Even aseptic Singapore or health-conscious Australia allows indoor smoking within certain parts of casinos or in VIP gaming areas.

It is getting harder for the James Bonds of the world to enjoy a cigarette with their martinis

It is getting harder for the James Bonds of the world to enjoy a cigarette with their martinis

Although the gaming industry is Macau’s bread and butter, the Macau legislators, after a long debate, have approved a partial smoking ban inside casinos, covering at least 50 percent of gaming areas. However, the new legal regime is short of its legislative policy intentions and technically questionable in terms of its efficacy.

In very generic terms, the smoking ban means at least 50 percent of gaming floor space must be designated as a non-smoking area. Smoking areas and non-smoking areas must be physically separated, but for existing casinos (including those under construction), the rules seem to be more flexible: physical barriers are replaced by air curtains, two-meter high gas-proof barriers or transition zones (separation areas with a strong ventilation system or a 4-meter gaming free buffer).

The anti-smoking rules have failed to implement a coherent legal framework in a number of areas.

THE GRACE PERIOD

The first perplexity we find is the fact that bars, nightclubs, saunas and massage parlors were given a grace period of three years, until January 2015, while the casinos only had a one-year grace period to adapt to the new rules.

Considering gambling taxes form 70 percent of Macau’s government income, the rationale behind this is difficult to understand. The impression the government leaves us with is one of embarrassment of the public policy of being so dependent on the gaming industry.

MASS GAMING FLOOR v VIP ROOMS

Strictly speaking, the law establishes no difference between main gaming areas and VIP rooms, which means VIP rooms must be considered part of the property’s total gaming area for the purposes of imposing the non-smoking areas.

In practical terms, as a result of how the VIP rooms are operated and the amount of money rolled, as well as the high rollers’ idiosyncrasies, these areas will most likely remain as smoking areas while all non-smoking areas will be allocated to the mass gaming floor.

The fact is the casinos will concentrate most of their more profitable gaming tables in smoking areas, overpopulating these areas and increasing the concentration of cigarette smoke.

If the legislation is here first and foremost to protect the casino employees, we just can’t see how this is achieved. No consideration was given as part of the overall casino smoking ban policy to the layout of the gaming floor, distribution of gaming tables and the existence of closed premises such as VIP rooms. This creates obvious loopholes that will be explored to the advantage of the casino and the detriment of the employees.

A US$50 FINE!

Does anyone really think that a US$50 dollar fine is effective in dissuading a smoker who is betting, say, HK$2 million a hand from smoking while gambling? Only an effective penalty system will express how serious the public authority takes the enforcement of its laws.

Once again, we have approved shortsighted laws that are not only easily circumvented but fail to accommodate an intelligent balance between all prevailing interests.

As has been pointed out: “It’s about the health of casino employees, who were a huge advocate to banning any and all smoking in Macau casinos. But, it is also about casino patrons and keeping them happy … while taking their money”.

Luís Mesquita de Melo is a partner at MdME Lawyers | Private Notary, a leading Macau full service law firm. To contact Luís, email [email protected].