On July 11th, the Chines shut down all casinos for the first time since the first Coronavirus outbreak. Now, Macau casino giants are standing dark as the worst outbreak of the virus to hit the city spreads. People have been ordered to stay home, venturing out only for essential services. Police are monitoring the people who do wander out, and serious punishment awaits anyone who disobeys the government.
With over 30 Macau casinos shuttered, these recent events have sent stocks of gambling companies falling… all as authorities struggle to contain the worst Coronavirus outbreak yet in the world’s biggest gambling hub. Three of those companies affected by this drop are American: The Sands, who have six casinos in Macau, had their Chinese stocks tumble 8.5%. Wynn has three casinos there and saw their Chinese stock fall 9.7%. Meanwhile, MGM has two casinos there and watched their Chinese stock decline by 4.2%.
The closure is expected to have serious economic fallout for American gambling companies, even though many these casinos had been running on fumes leading up to the shutdown. The properties were practically closed in the three weeks before this mandated shut down, with hardly any visitors and a skeleton staff. A representative from J.P. Morgan commenting on gambling revenue for the Macau casinos stated that “We would probably need to write-off July and likely August…”
China has adopted a very strict “zero COVID” policy, meaning that over 19,000 people are currently in mandatory quarantine. Some thirty zones around Macau have been deemed “high risk” and are now under a strict lock-down. And the 600,000 residents of the city will be required to take part in mass COVID-19 testing, even though over 90% are fully vaccinated.
In addition to the possibly economic issues for US companies, the gambling industry there employs a vast majority of the city’s population. It also contributes over 80% of the governments revenue. And as these Macau casinos wait to re-open, the shut down order has already been extended once, and could be extended again. At the time of the publication on this article, the city was hoping to re-open on July 23rd.
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