Macao casino shutdowns extended five days
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Stock market prices for the affiliates of three Las Vegas companies operating in Macao began rebounding Monday, even after a weeklong government-ordered casino shutdown was extended by five days.
The casino lockdown, which began July 11 and had been set to expire Sunday, is now scheduled to end July 23.
Analysts have estimated the closures will cause the 41 casinos operating in Macao to lose $1 billion. The government said it intends to distribute $1.24 billion to businesses affected by the shutdown.
As part of the lockdown because of COVID-19, authorities have suspended dine-in services and ordered all residents to avoid leaving their homes unless absolutely necessary. Those who need to go out must wear KN95 masks or similar protection.
The public is required to register for passes to ride buses and other public transportation, which is operating at reduced capacity.
Now at 1,700 infections
The city, which has a population of 680,000, recorded 31 infections on Friday. Since its latest outbreak that began June 18, the city has reported some 1,700 infections.
Macao’s government is mirroring the Chinese central government’s “zero COVID” policy of attempting to eradicate the disease by isolating every infected person instead of taking measures to limit its spread.
The 12-square-mile special administrative region is served by one hospital. The 7,000-seat East Asian Games Dome, the largest indoor arena in the city and near the Cotai Strip, where most of Las Vegas Sands Corp. properties are located, has been converted into a temporary medical facility. All three companies have properties on Cotai and on Macao’s main peninsula.
Three Las Vegas companies with holdings in Macao — market leader Sands, Wynn Resorts Ltd. and MGM Resorts International, which has a partnership with a Hong Kong-based operator — have declined to comment on the effects of the lockdown.
Spokesmen for Sands and Wynn on Sunday reiterated declining comment and MGM did not respond to messages seeking comment Sunday.
Sands, which operates six resorts in Macao, has scheduled its second-quarter earnings call for Wednesday, when representatives of the company said they’d discuss Macao.
Wynn, which has three properties there, and MGM, which has two, are set to discuss second-quarter earnings in early August.
Gaming industry analyst Brendan Bussmann, founder of Las Vegas-based B Global, said the shutdown also is challenging because the government of Macao is on the verge of renewing casino licenses by the end of the year, which is one of the reasons the local companies aren’t commenting on the shutdown decisions.
‘A very challenging time’
“This has become a very challenging time for Macao as it faces the current shutdown after the prolonged quarantine period that has put revenues at a fraction of what they were before the initial shutdown in February 2020,” Bussmann said in an interview Thursday.
“As operators respond to the renewal, it makes for an interesting predicament of when the market turns positive again and laying out a wager on the next 10-year period.”
Macao already has been battered by restrictive travel policies, low visitation, border closures and gross gaming revenue declines resulting from strict Chinese health and safety policies over the past two years as a result of the pandemic.
The Macao government’s order last week marked the first time since February 2020 at the start of the pandemic that casinos were closed outright, reflecting official urgency about containing the latest outbreak. Restrictions imposed in June limited their workforce to 10 percent of normal levels.
Macao, after years of gaming revenue successes that at its peak hit $45 billion in 2013, has seen dramatic revenue declines over the past 2½ years.
According to Macao’s Gaming Inspection and Coordination Bureau, gaming revenues produced in 2020 and 2021 were the lowest single-year back-to-back totals since 2006 and 2007.
The special administrative region’s 41 casinos won $10.8 billion (U.S.) in gaming revenue in 2021, an increase of 43.7 percent over the $7.56 billion collected in 2020. But the total was still more than 70 percent below pre-pandemic 2019, when casinos in the region produced $36.6 billion.
In the first six months of 2022, gaming revenue is at $3.3 billion. July numbers are expected to be reported in early August.
Subsidiary companies affiliated with Sands, Wynn and MGM took losses on the Stock Exchange of Hong Kong over the past week.
Sands China Ltd., affiliated with Las Vegas Sands, was down 8.5 percent from Monday’s closing price of $18.66 to close Friday at $17.08 a share.
Wynn Macau Ltd., affiliated with Wynn Resorts, was off 9.7 percent, to $4.73 on Friday.
MGM China Holdings Ltd., affiliated with MGM, was down 4.2 percent, to $4.11 a share.
In early trading Monday, share prices were mixed with stock prices up less than 1 percent from the opening bell for each of the three companies.
The Review-Journal is owned by the Adelson family, including Dr. Miriam Adelson, majority shareholder of Las Vegas Sands Corp., and Las Vegas Sands President and COO Patrick Dumont.
