Macau’s casinos took in 3.1 billion patacas in February 2020. A year earlier the same month had brought 25.4 billion. The Gaming Inspection & Coordination Bureau, the local regulator, put the new figure at about $387 million, a drop of 87.8% that AFP called the worst monthly fall on record.
The cause was a government order. On Tuesday, 4 February, Macau’s chief executive Ho Iat Seng asked every casino operator to suspend business for two weeks as the new coronavirus spread. CNBC reported that the city had 10 confirmed cases at that point, along with tight limits on movement in and out of the territory. Residents were told to wear masks and stay home where possible.
Forty-one businesses go dark
CBS News, citing the Wall Street Journal, said an official told a news conference the suspension would shut 41 gambling and entertainment businesses. The Venetian Macao, partly owned by Las Vegas Sands, and Wynn Macau, owned by Wynn Resorts, were among them. Theaters, bars, clubs and other places where crowds gather were swept up too.
Casinos closed from 5 February and reopened on 20 February, the Motley Fool reported. That is 15 days. Reopening came with strings: travel restrictions stayed in place, and operators could run only a limited number of tables and seats per table.
What the closure cost
Wynn Resorts said the shutdown was costing it between $2.4 million and $2.6 million a day, according to the Motley Fool. MGM Resorts put its own loss at $1.5 million a day. Las Vegas Sands gets 64% of its revenue from Macau.
Macau had been slipping before any of this. The Fool pointed to a weakening Chinese economy and a trade war with the United States that hurt local businesses and tourism, and noted that gambling revenue had been falling at double-digit rates for several months.
The city has little else to fall back on. AFP said Macau earns more in one week from gaming than Las Vegas does in a month, and the sector supplies 80% of government revenue. Most visitors are mainland Chinese, and their arrivals had plummeted since the outbreak began. The government, AFP added, was pushing casinos to keep paying staff and avoid lay-offs.
Forecasts
The infection count stayed low. Macau had recorded only 10 cases and had found no new one for a month, AFP reported at the start of March.
Analysts quoted by the Fool expected revenue to be down 70% in March and 35% for the second quarter, with a 24% decline for the full year. Others were more upbeat. JPMorgan Chase analysts wrote that they did not think the virus “will curb gamblers’ enthusiasm in a sustainable way,” and expected limited damage to long-run earnings power.
Sources
- Macau to suspend casino operations for two weeks to curb spread of virus (CNBC)
- Coronavirus: Macau closes casinos over coronavirus fears (CBS News)
- Macau casino takings plunge a record 88% (Asia Times, AFP)
- COVID-19 Sends Macau Casino Revenue Plunging 88% in February (The Motley Fool, Rich Duprey)
