Macau's casinos have reopened on Thursday (February 20th), and the corona virus has kept them idle for 15 days. However, special protective measures still apply. In addition, further serious sales losses are expected. What about the Asian gambling stronghold?
The skyline of the casino metropolis Macau.
Macau operates 39 active casinos, the city lives from Chinese gambling tourism. © Macau Photo Agency / Unsplash
Playing with a protective mask
Coronavirus had paralyzed Macau's casinos for over two weeks. There were ten infections, including in the casino area. Now the 39 active casinos in the Chinese Special Administrative Region have started operating again. Macau's Finance and Economics Minister Lei Wai Nong, however, emphasized that special protective measures should continue to be followed. Specifically, it is about maintaining strict hygiene regulations.
Disinfection and tests for fever were ordered. In addition, greater distances must be maintained between gaming tables, slot machines and between visitors. For example, only three or four people can sit at baccarat tables, which usually consist of seven seats. To do this, the players must be at least one seat away from the dealer. On top of that, central betting stands are prohibited.
Although no further infections have occurred since the closure in Macau on February 4th, employees and casino customers must wear a protective mask “at all times”. According to Minister of Economy Lei, the individual establishments are operated by six competing providers – SJM, Galaxy, Sands, MGM, Melco and Wynn. They should start up their business again within 30 days, in compliance with the requirements.
Customers stay away
The interim balance on the day of the reopening is rather negative for the casinos. The Macau Daily Times (MDT) speaks of an almost deserted Cotai strip. The gaming tables were understaffed, just 30 percent went into operation. In addition, there were more journalists than customers when the casinos opened their doors. The first guests should be photographed.
As part of the investigations, MDT visited “several popular casinos”. The casino in the StarWorld Hotel started 15 minutes late, but according to the staff it was “a matter of preparation”, the situation was “normal”. Overall, the casinos seemed to be following the new restrictions, but were also free of customers. The newspaper spoke of only “a handful of players”.
A main reason for the absence of guests is the current travel stop between China, Hong Kong and Macau. Since gambling is banned in China, with the exception of state lotteries, millions of Chinese tourists travel to Macau each year to gamble. Entry is currently prohibited. As early as January, the gambling center saw a decline in tourism of around 80 percent. Losses of millions have occurred since the outbreak.
Opening only applies to casinos
How big the fear of the spread of the highly contagious virus is still becomes evident from the fact that the lifting of the closure action is initially limited to the gaming industry. Other entertainment stores such as bars and nightclubs remain closed on orders from Prime Minister Ho Iat Seng.
At a press conference, Administration and Justice Secretary André Cheong Weng Chon emphasized that only the government is authorized to order the city's leisure facilities to be closed and reopened. Meanwhile, the Secretariat for Social Affairs and Culture announced a series of stringent health controls for non-resident workers commuting between the tourist city of Zhuhai and Macau.
Massive sales slump
Macau's head of government called the shutdown two weeks ago a “complicated” decision. While Macau derives over 60 percent of its gross domestic product (GDP) from the gaming sector, curbing the virus was a top priority. The damage amounted to millions, for example Wynn Resorts (Las Vegas) had stated losing $ 2.4 million a day through the stop.
According to economic experts, the first quarter of the year is already “lost”, overall only a fraction of the usual turnover is expected. As the number of infected people in China has now risen to over 74,000, little improvement is expected in the second quarter. The third quarter, on the other hand, is difficult to estimate, while normal business operations are expected in the fourth.
Falling revenue since October
Even before the outbreak of the corona virus, Macau had slumped sales. The local gambling area
Hörde (Macau Gaming Inspection) reported a 22.4 percent decline in gaming revenue in July 2019 in July, August and September. The decrease resulted, among other things, from a decline in the VIP baccarat business.
In the third quarter, the division only earned 3.4 billion euros. At the same time, Macau's GDP also fell. A loss of 3.2 percent was recorded in the first quarter of 2019, followed by a further decline of 1.8 percent until the end of June. The longer-term effects of the current state of emergency on economic performance are hardly foreseeable.
According to the Spiegel, Macau itself is not at risk of poverty. The financial reserves would be the equivalent of over 55 billion euros. This corresponds to around 90,000 euros per inhabitant. In this sense, it will “provide financial assistance to citizens and small businesses”. As soon as the crisis is over and the borders are opened again, the tourists would come back. It remains to be seen whether the forecasts will come true.