Known as the “Gambling capital of the world” or “The Monte Carlo of the
 East”, the former Portuguese colony of Macau is China’s only location
 where gambling is legal. Gambling tourism is Macau’s biggest source of
 revenue, making about 50% of its economy. On February 5th, however,
 following the recent coronavirus outbreak, the majestic city has become a
 near-ghost town during what is typically its busiest time of the year.
 Because the local government has drastically limited visits from mainland
 China, arrivals have suffered a significant 69% drop. Coupled with the
 impact of a slowing Chinese economy and anti-government protests in
 neighboring Hong Kong, the virus is worrying Macau officials deeply.
 

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 The outbreak also coincides with the Lunar New Year holiday during which Macau
 enjoys record visitation. Analysts forecast a decline in gaming revenue of at
 least 30% for as long as health restrictions and strict entry regulations on
 tourists are in place. Casinos say they are losing between US$1.5 million –
 US$2.6 million daily to keep their staff on payroll and maintain contractual
 obligations. Their operators’ share prices have also plunged by as much as 6%
 for MGM China Holdings Ltd., 5.7% for Sands China Ltd, 4.8% for Wynn Macau Ltd
 and 4.7% for Galaxy Entertainment Group Ltd.

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 Starting with February 20th, the government allowed casinos to reopen after a
 two-week suspension aimed at controlling the virus outbreak. Nonetheless, the
 gaming regulator has imposed strict rules: temperature checks, mask protection
 and health declarations for staff and guests. To ensure adequate distance
 between people, only half the tables on a casino floor are permitted to
 operate. Clients are not permitted to congregate, according to a government
 notice. Baccarat tables, which normally seat seven people and dozens of
 observers, will only allow four players.


 All operators have 30 days to start functioning normally as mandated by the
 government. Analysts and executives predict that despite casinos reopening,
 gaming revenue will drop at least 80% in February and 50% in March. It will
 take weeks to get back to normal even though Macau has only reported 10 cases
 of coronavirus infection and no new cases since February 4th.


 Besides casinos, nearly 30 hotels have been shut down. That includes shows,
 non-gaming attractions, and most restaurants. Authorities have stated that
 until further notice entertainment venues including bars will remain closed.
 According to official figures, hotel occupancy has dropped from 90% last year
 ago to 12%.


 Even though Macau’s government has pledged US$3.4 billion to support domestic
 consumption, many businesses dependent on tourists and casinos have been
 seriously affected.


 The coronavirus has infected more than 70.000 people across China, with close
 to 1.700 deaths reported in the Hubei province alone.

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08-03-2021

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Macau casinos hit hard by China’s coronavirus outbreak