In an attempt to stop a spike in the number of new Covid-19 cases, the Macau government ordered the shutdown of all casinos last week, on July 11. Now, in a new announcement, authorities said the lockdown was to be extended for another five days, set to end on July 23. According to analysts, the 41 casinos currently operating in Macau are bound to lose $1 billion due to the latest closures. However, the government said it intends to distribute $1.24 billion to businesses affected.
Gaming industry analyst Brendan Bussmann, founder of Las Vegas-based B Global, said the shutdown is challenging because the government of Macau is on the verge of renewing casino licenses by the end of the year, which is one of the reasons the local companies aren’t commenting on the shutdown decisions.
“This has become a very challenging time for Macao as it faces the current shutdown after the prolonged quarantine period that has put revenues at a fraction of what they were before the initial shutdown in February 2020,” Bussman said as reported by Las Vegas Review-Journal.
“As operators respond to the renewal, it makes for an interesting predicament of when the market turns positive again and laying out a wager on the next 10-year period,” he added.
The government’s order last week marked the first time since February 2020 at the start of the pandemic that casinos were closed. Covid-19 has taken a toll on the sector, as it had been struggling since the start of the pandemic, with revenues tumbling 70% in 2021 compared with 2019 to $10.8 billion. Macau casino shares have also sunk dramatically, between 21% and 76% since 2020.
In the first six months of 2022, gaming revenue is at $3.3 billion. July numbers are expected to be reported in early August.
According to local reports, more than 30 zones in the city have been deemed high risk and are now under lockdown, meaning no one is allowed to enter or exit, and people are to stay home unless absolutely necessary. Those who need to go out must wear KN95 masks or similar protection.
Authorities have also suspended dine-in services and citizens are required to register for passes to ride buses and other public transportation, which are operating at reduced capacity.
The Grand Lisboa Palace, and the Grand Hyatt, in Macau.
Due to the fact that Macau only has one public hospital for more than 600,000 residents, authorities earlier this month assigned two hotels in casino resorts to be used as medical facilities. The east wing of SJM Holding‘s Grand Lisboa Palace, and the Grand Hyatt hotel, owned by Melco Resorts, together provided about 800 rooms to that end. The two hotels joined Sands China‘s Sheraton hotel and The Londoner resort, which have already been used as quarantine facilities.
Since mid-June, Macau has reported 1,700 cases. The city adheres to China’s “zero-COVID” policy that aims to curb all outbreaks.
Sands, which operates six resorts in Macao, has scheduled its second-quarter earnings call for Wednesday, and representatives of the company said they’d discuss Macau. Wynn, which has three properties there, and MGM, which has two, are set to discuss second-quarter earnings in early August.
Shares in Sands China Ltd., were down 8.5%, Wynn Macau was off 9.7%, and MGM China was down 4.2%.
