Macau Gambling Stocks Fall As 7 Day Covid-19 Lockdown Begins

Macau’s six big casinos have endured a major shares wobble on the first day of a Covid-19 lockdown in the city, aimed at curbing infection rates.

Macau is the gambling mecca of east Asia and relies on visitors from China, Hong Kong, Singapore and Malaysia for much of the territory’s income.

The decision was made to shut down the city for seven days starting Monday after the Grand Lisboa hotel and casino became the scene of the latest breakout of the virus.

And stock markets have reacted negatively to the new lockdown measures, which will prevent gamblers from attending casinos for at least a week.

According to Bloomberg, stock prices in Macau’s six major casinos – Wynn Macau, Sands China, MGM China, Galaxy Entertainment, Melco Resorts and SJM Holdings – fell on average 6.3% during Monday trading.

Sands China suffered the biggest hit at 9%, while Wynn Macau fell as much as 7.8%.

Covid In Macau

Saturday saw the city report a further 93 new cases, bringing the total past 1,500 since the outbreak began in mid-June.

It triggered the first shutdown of casinos since February 2020 when a 15-day enforcement aimed to curb Covid in the early days of the pandemic.

Around 19,000 people are in mandatory quarantines, while schools and entertainment venues, including bars and cinemas, had already been closed before the casino shutdown.

The lockdowns come as the city embraces the fast-spreading Omicron variant for the first time. Most people have received two vaccinations but it is unclear how many have been boosted.

And the measures serve as a major blow for the territory’s economy. Macau’s gambling industry accounts for 80% of the region’s economy, but since March it’s takings from the roulette, blackjack and craps tables has been falling by as much as 50% month-on-month.

It’s likely that one of the peak tourist seasons of July and August will now be a write-off, with visitors put off from travelling to Macau. An analyst from JPMorgan Chase & Co recently revealed that most of Macau’s casinos could ride out between nine months and two years without revenues.

AFP: Macau closes casinos, most businesses as Covid outbreak worsens. Last month Macau closed most of its businesses, ranging from bars to cinemas, as it adheres to a zero-Covid strategy which seeks to stamp out the virus through lockdowns, strict border controls and mass testing

— Markets & Mayhem 🤖 (@Mayhem4Markets) July 10, 2022

And the shutdown comes at a difficult moment for the casinos. Macau recently published its procedure for casino licence applications, with the Big Six all required to re-apply for their expiring licences.

The licences that were handed out 20 years ago have now come to an end. The new licences will last for 10 years, rather than 20, and include greater powers for authorities to oversee how casinos are being run.

There is also an incentive for casinos to attract foreign trinkets from places other than China to their gaming tables. However, the new coronavirus measures will make this near-impossible in the coming months, and mean Macau could miss the peak summer season for American, Australian, Malaysian, Japanese and European travellers.