Macau to close casinos for two weeks
The already weakened business of casino operators face the possibility of being forced to close for a longer period of time
The casino industry in the world's biggest gambling hub, Macau, has been asked by the government of Macau to shut down temporarily as Chinese authorities try to control the chaos brought about by the deadly coronavirus. The closure shall begin on February 5 and will last for 15 days.
This closure would be the second time ever to happen since the casino industry in Macau began in 2002. Back in 2018, Macau casinos closed for just 33 hours following the destruction wrought by super typhoon Mangkhut which cost the industry a revenue worth $186 million.
Analysts guesstimate that the shutdown due to the coronavirus could result to casino operators getting around half of their quarterly revenue wiped out, and should they be forced to remain closed for longer, they could potentially lose as much as 70% of their revenue.
From bad to worse
The casino industry in Macau was actually already reeling from the consequences that come with a weakened VIP gambling market in which last year marked the first time ever that casinos saw a decrease in gaming revenue since the rebound started in late 2016.
Then came the coronavirus, and considering Macau is the only place in China where gambling is legal, it is no surprise that the gambling hub's legs have been crippled much further - revenue went down to 80% since the virus outbreak started in mid-January.
Casino operators like Wynn Resorts and Melco Resorts & Entertainment have had their shares plummet down the most because they get most of their revenue from Macau. Rivals like MGM Resorts and Las Vegas Sands, which are more geographically-diverse, seemed to have fared much better.
Wynn Resorts issued a statement, "Our greatest concern and our top priority is the health and safety of our employees, their families and the citizens of Macau. We believe that our goals and the goals of the Macau government during this challenging period are fully aligned. We support the Government's decision to prioritize public safety and temporarily suspend the operations of all of Macau's gaming areas, which we believe is in the best long-term interests of everyone concerned."
MGM Resorts responded in an email, "MGM will follow the government's directions in the fight against this epidemic. We are closing our casinos and gaming areas, while maintaining non-gaming facilities to support hotel guests in both of our properties. We will continue to work closely with the Macau government as the situation progresses."
Reports say the coronavirus has caused the death of 490 people already and infected 20,000+ in China. This means the casinos will absorb the costs related to the outbreak rather than allow their employees to bear the burden, which will definitely hurt their earnings this 2020.
In total, there were 10 confirmed cases of the coronavirus in Macau.
The suspension of casino gambling activities in Macau could be extended, depending on the severity of the coronavirus outbreak.
Source:
https://www.nytimes.com/2020/02/04/business/coronavirus-macau-gambling.html
https://www.cnbc.com/2020/02/04/macao-requests-casinos-halt-activity-amid-coronavirus-outbreak.html
