Gambling paradise Macau has taken the decision to close all casinos in the city for at least the next week after an outbreak of the Omicron variant of Covid-19. Dubbed the world’s biggest gaming hub, Macau falls under Chinese control and is therefore subject to the Beijing government’s strict Zero Covid policies.
19,000 Macau residents have been placed under strict quarantine, and the closure of all non-essential businesses has been ordered. That includes the 30+ casinos to which the city plays host, and as a result the share prices of casino companies have fallen in the wake of the news.
Since the middle of June, there have been more than 1,500 identified cases of Covid – a significant number in a city-state which has a population of just 600,000 and which has had most of its residents receive at least the first two doses of the Covid vaccine along with a booster shot. This is, however, the first exposure the region has had to the Omicron variant, which may be responsible for the virulent spread.
The most significant question at the present time is whether the week-long shutdown will have the desired effect of bringing cases back down to pre-outbreak levels, or whether there will need to be further restrictions announced. This is of particular importance to a state which is heavily dependent on casino gaming for its regional economy. Tourists pour into the region to play in its casinos and spend a lot of money while there. Shutting down for even a week will deliver a significant blow in the short term.
This is understood to be a blow the Macau casino industry could do without, as a recent outbreak in mainland China led to stricter restrictions being placed on residents there. That was understood to have caused casino profits to fall by up to 50%, which is particularly bad news for an economy which recoups 80% of its business revenue from gambling.
A quick look at share prices for the city’s main casino operators indicated that they have been negatively affected by the lockdown. Sands China, one of six licensed operators in the city, saw a fall of more than 8% when exchanges opened on Monday after the announcement. Wynn Macau Ltd, for its part, fell by 6.7%, and the pattern was widely repeated among other providers in the region. As of this moment, any impact on online casino betting is likely to be limited as Macau has no policy for or provision of online betting. There may be increased use of offshore sites during the shutdown, but Macau itself does not operate online casinos so any information on local usage will be anecdotal at best. As things stand, all efforts will be focused on bringing this outbreak to a speedy conclusion, as Macau can ill afford the loss of revenue that it must have thought was a thing of the past.