Guo Kai | Visual China Group | Getty Images Macau closed all its casinos for the first time in more than two years on Monday, sending shares of gaming companies tumbling as authorities scramble to contain the worst outbreak of the coronavirus in the world’s biggest gambling hub. The city’s 30-plus casinos and other businesses will close for a week, and people have been ordered to stay at home, although short trips for essential services have been allowed. Police will monitor the flow of people outside and severe punishments will be imposed for those who disobey, the government said. Although many casinos have effectively shut down over the past three weeks with minimal staff allowed in, the more drastic measures have hit investor confidence hard. Some analysts predicted that any recovery in gaming revenue might not happen until the end of the third quarter or during the fourth quarter. “We will probably need to write off July and probably August as well from the models,” said DS Kim, an analyst at JP Morgan. Shares of Sands China fell 9%, while shares of Melco International, Wynn Macau, SJM Holdings, Galaxy Entertainment, MGM China fell between 6% and 7%.
CNBC Health & Science
Read CNBC’s latest global health coverage: Macau has recorded around 1,500 Covid-19 infections since mid-June. About 19,000 people are under mandatory quarantine as the government adheres to China’s “zero Covid” policy which aims to eliminate all cases, bucking a global trend of trying to live with the virus. More than 30 zones in the city that have been deemed high-risk are now under lockdown, meaning no one is allowed in or out for at least 5 days. While the government said it did not impose a city-wide lockdown, the strict measures mean Macau is effectively closed. Casinos last closed in Macau in February 2020 for 15 days. The government has been reluctant in the past to close casinos because of its mandate to protect jobs. The sector employs most of the population directly and indirectly and accounts for more than 80% of government revenue. Frustration is growing over the government’s handling of the epidemic. Brawls have broken out at examination centres, while some residents have been forced to wait in queues of more than 20 hours to access healthcare facilities. Residents will be required to take part in mass Covid-19 tests four times this week. They have already been tested six times since mid-June and are expected to do rapid antigen tests daily. More than 90% of Macau’s 600,000 residents are fully vaccinated against Covid-19, but this is the first time the city has had to deal with the rapidly spreading microbe variant. Authorities have added two hotels at popular casino resorts to be used as Covid medical facilities as they try to increase capacity to deal with a surge in infections.
