Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/140891
Authors: 
Zhang, Jing Hua
Tam, Kwo Ping
Zhou, Nan
Year of Publication: 
2016
Series/Report no.: 
Economics Discussion Papers 2016-21
Abstract: 
The gaming economy has expanded rapidly in East Asia during the past decade. Despite the public health hazards of Second Hand Smoking (SHS), smoking bans in casinos remain controversial due to concerns over potential economic losses for casino firms. Applying an event study method, the authors examine the abnormal returns of casino stocks in response to three unexpected announcements of smoking bans in casinos from 2011 to 2015 in Macao. The analysis reveals that the announcements were associated with differentiated abnormal returns of casino stocks. The stocks of the traditional casinos in Macao suffered significant cumulative abnormal losses of 1% to 6%, while the Las Vegas themed casinos in Macao enjoyed significant cumulative abnormal excess returns of 1.4% to 4.8%. Furthermore, the authors find that the low air quality in gaming venues and high dependence on gaming revenues are associated with abnormal losses, while positive management initiatives are significant correlated with positive abnormal returns. This study provides a full picture of the impacts of smoking bans on casinos and will thus be a useful policy reference for the Macao government, as well as for the rapidly growing gaming industry in Asia and other developing economies.
Subjects: 
smoking bans
economic impacts
casinos
abnormal return of stocks
Macao
JEL: 
L83
K32
Z33
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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