February casino gross gaming revenue (GGR) in Macau is likely to decline by more than 80 percent in year-on-year terms. That is despite a decision by the Macau government not to extend the current closure of the city’s casino industry, said brokerage J.P. Morgan Securities (Asia Pacific) Ltd in a Monday note.
“Casino reopening news could provide some relief on sentiment, as many observers had thought further suspension was possible,” wrote analysts DS Kim, Derek Choi and Jeremy An.
They added: “We see the news itself having little impact on fundamentals, as business will likely remain extremely slow anyway amidst the restrictions on visas [from mainland China] (individual visit and package tour permits are restricted) and transportation (very limited availability of flights/trains). Most Chinese players are probably unable or unwilling to travel at this point, in our view.”
The Macau government announced on Monday it would not extend the current closure of the city’s casino industry. The measure had been introduced to prevent novel coronavirus Covid-19 spreading locally.
The existing 15-day shutdown runs until Wednesday inclusive. Operators will then be given a period of up to 30 days to resume casino operations. The companies will have to apply to the government if they want to extend the suspension of their respective operations beyond Wednesday.
Sanford C. Bernstein Ltd said in a Monday note following the Macau government announcement that “even with the casinos reopening, there will still be a dearth of customers.” Data provided by the Macau government showed that the city had welcomed just about 2,800 visitors on Sunday, with about half from mainland China.
The mainland authorities have stopped – until further notice – issuing fresh permits for Chinese independent travellers to visit Macau under the country’s Individual Visit Scheme. Tour groups from the mainland to Macau are also suspended. The authorities have said the measures are part of the efforts to cut travel across China and so reduce the risk of further spread of the coronavirus.
During Monday’s press conference, the Macau government also announced that non-resident workers who have been to the mainland in the 14 days prior to their intended arrival in Macau, will only be permitted to enter the city after they have to complete a 14-day quarantine period and obtain an official medical declaration issued by a recognised entity, confirming they are not infected by the coronavirus. The move aimed to lower the risk of “cross-contamination” of the viral pneumonia, namely by reducing the number of people crossing the border between Macau and Zhuhai, where most of these non-resident workers that live outside of Macau reside.
JP Morgan said in its Monday note that the 14-day quarantine for non-resident workers “could affect the opening schedule” for upcoming casino properties “to a certain extent”. That was because the majority of construction workers in Macau are non-residents living in Zhuhai.
“Including the broader impact from Covid-19 on logistics, etcetera, we see a possibility that the opening of new properties (e.g., SJM Holdings Ltd’s Grand Lisboa Palace, Galaxy Macau’s Phase III, Sands China Ltd’s Londoner) may be pushed out by a couple of months versus prior schedules,” stated the brokerage.
JP Morgan said that “the biggest known unknown” regarding the recovery of Macau’s gaming industry was “when the China government feels it is ‘safe’ to resume the flow of people”. The brokerage said that it was likely that “meaningful disruptions” to travel from mainland China to Macau would “stay at least for another month or so,” meaning March GGR could drop “well over 50-percent in year-on-year terms”.
Apr 03, 2020Kangwon Land, the only casino resort in South Korea where the country’s nationals are allowed to gamble, has decided to extend – for a sixth time – the temporary closure of its gaming venue....
"The casinos have to operate 24 hours a day, 365 days a year. The decision [to suspend casino operations] is up to the government. As of now, we don’t have any plan to change the existing regulations"
Lei Wai Nong
Macau Secretary for Economy and Finance