The tenth case of coronavirus was confirmed in Macau just a few days ago, prompting officials to take more drastic measures to try to halt the spread of the disease. Most gamblers coming to Macau are from mainland China, so the risk of infection is high and growing with each passing day.
Macau’s Gaming Inspection and Coordination Bureau (DICJ) issued an order two weeks ago that all casino workers had to wear respiratory face masks. And while the precautions were enough at first, a casino worker was diagnosed with the virus last week and the government was ready to take more serious steps. Yesterday, the DICJ announced casinos would be closing for two weeks.
This could lead to serious financial consequences for Macau, whose main source of income is gambling. The closure is expected to reduce gross gaming revenue (GGR) by 75% in February alone.
Early estimates by JP Morgan experts paint a bleak picture for Macau. “February GGR is expected to drop roughly 75% to US$700 million (vs US$2.8 billion originally), which in turn would reduce our annual GGR by ~6%,” they said during a recent interview. “Assuming only a two-week shutdown followed by some soft business resuming in late February and March, Q1 could show GGR year-on-year decline of 50%. If casinos were to remain closed for the rest of Q1, GGR would show a year-on-year decline of over 70%.”
Macau casino operators are hopeful that a two-week closure would be enough to halt the spread of the virus, but officials have warned that the shutdown could be extended if necessary. “There are mixed views on how virulent and lethal this outbreak may be (so far, contagion is much worse than SARS, but mortality is materially lower),” they added.
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