Macau Casinos to Shut Down as Coronavirus Containment Efforts Intensify

  • Edited
  • 3 minutes

Macau has been one of the places that have taken the biggest hit due to the outbreak of the coronavirus in China. The sluggish start for the gambling hub was evident right at the beginning of the year and it was hoped that things would quickly get back to normal. Unfortunately, this has not happened.

By the end of January, Macau’s economy had been brought to its knees during a period that is usually its peak season. This was all due to the coronavirus and recent travel bans as China works round the clock to contain the virus which has at the time of this writing claimed over 200 lives. The number of visitors dropped by up to a whopping 80 percent in the first few weeks of the year, a situation that has turned the very vibrant region into some sort of ghost city.

Now, in a bid to further reduce the risks of transmission of the coronavirus, the Macau City officials have asked all the casinos to close shop for the next two weeks. This move is expected to help in the containment of the virus – as it stands, ten cases of infections have been reported in Macau. Needless to say, the nature of the virus seems to imply the outbreak could only get worse if casino operations continue.

Hopefully, by the time the two weeks elapses, the efforts to contain the virus will have been successful. In case the issue of the outbreak is still a problem by that time, the region’s casinos will remain closed until further notice.

The Costs

The two-week shutdown of the gambling hub’s casinos is definitely going to have a huge impact on the revenue projections for the first quarter of the year. Revenue is expected to drop by up to 50 percent within that period compared to last year. According to Macau Chief Executive Ho Iat-seng, the city will be able to afford the economic costs of the shutdown despite recent downfalls.

“This is a difficult decision but we have to do it, for the health of our Macau residents,” he said during the announcement of the shutdown.

Angela Han Lee, an equity analyst with China Renaissance Securities HK, also noted the Macau casino operators are willing to bear some of the fixed costs and expenses instead of passing all that burden to their staff members. Doing so will definitely cause significant drops in the near-term profit. Hopefully, everything will be regained once the coronavirus is contained and business at the gambling hub begins again.