A new outbreak of Covid-19 cases in Macau puts casinos on alert
Casinos remain open for the moment, but revenue is expected to reach near-zero levels.
Macau.- Macau is facing a new outbreak of Covid-19 cases, and possibly its largest since the pandemic started over two years ago. According to the government, 31 new cases have been detected in the last 24 hours. Mass testing of the population started from noon on Sunday and is due to be completed in 48 hours.
Authorities have previously conducted three mass testings. The last was in October, after over 70 new Covid-19 cases were detected in the city.
The government said that anyone wishing to leave Macau must present a certificate within 24 hours of their scheduled departure time, certifying a negative result for Covid-19 infection.
Authorities in Zhuhai, in the neighbouring Chinese province of Guangdong, have announced that people travelling to Macau from Zhuhai must present a certificate issued within 48 hours before departure.
Restaurants have closed for dining in and most stores have closed while Macau authorities have advised the public not to leave home. It’s terrible news for casino operators since, while casinos remain open for now, the fragile recovery of tourism is likely to disappear with gross gaming revenue (GGR) expected to be close to zero for up to several weeks, probably into July.
Analysts at Bernstein stated: “While Macau’s Secretary of Finance has said that the casinos will not be shut down, visitation into the city will be severely limited (perhaps being almost completely blocked) and revenues are set to plummet close to zero for at least the next week, and quite likely several weeks.”
In May, GGR was up 2.8 per cent month-on-month as it rose from MOP2.68bn (US$331m) in April to MOP3.34bn (US$413.4m) but was down 68 per cent when compared to May 2021 (MOP10.45bn).
Analysing the “cash-burn and liquidity situation of Macau’s casino operators, JP Morgan stated: “Under this harsh stress test, Sands and SJM have the shortest liquidity runaway of nine months until March 2023 while other operators such as Wynn/MGM/Melco have 1.4/2 years liquidity. Galaxy has available liquidity for 60 months.”
Last week, analysts at Fitch had lowered their forecast for Macau’s gross gaming revenue saying GGR may reach just 27 per cent of pre-pandemic levels mainly due to continuous restrictions linked to the Covid-19 pandemic.
The news of a new outbreak of Covid-19 cases could also risk the Legislative Assembly’s final debate and vote on Macau’s new gambling law amendment, which is scheduled for June 21 at 3pm.
Analysts at Bernstein said: “While the Legislative Assembly is slated to vote on the gaming law on Tuesday afternoon and there is no indication currently that this will be delayed, delays are possible if pandemic control measures become more restrictive.”
