A straw poll by GGRAsia on the Macau government’s efforts at controlling the coronavirus infection – including a 15-day shutdown of the city’s casinos – has produced some positive feedback.
Paul Tse, chairman of the American Chamber of Commerce in Macau, told us that Macau Chief Executive Ho Iat Seng – who has only been in the job since December 20 – had led a “well-conceived” and “well-executed” plan since the risk to Macau of the infection outbreak – that had originated in China’s Hubei province – emerged in late January.
Aside from the casino closures, the effort had included: temperature monitoring and other controls at checkpoints in and out of the city; ensuring sufficient supply of protective face masks for the city’s inhabitants; and extending government support to local small and medium-sized businesses.
The casino closure order had been “very positively received by the community,” said Mr Tse. “At the same time, the fact that the six gaming companies also promptly said that they would not let any staff go, and they would not force the staff to take [unpaid] holidays, is a further sign of good communication between the government and the gaming companies,” Mr Tse added.
Three of Macau’s six licensed casino operators have United States-based parent companies. All six Macau casino operators face the likelihood of a fresh public tender process when their current Macau gaming rights expire in 2022.
The business association boss added the government’s effort had helped to ensure local people felt “trust” for the local administration.
“The closure of the casinos in the short run might cause some financial pain to the entire community, but over the long run it is really to preserve Macau’s integrity and Macau’s health… before we can think of further development… So I don’t see anyone objecting strenuously to the temporary closing of the casinos,” Mr Tse added.
An online survey conducted by Macao Polling Research Association suggested that “89 percent” of those locals responding were “satisfied” with the government’s handling of the coronavirus situation. The poll was conducted amongst 1,926 Chinese-speaking local residents during February 6 to February 8. The best-rated measures – in descending order – were the “supply of masks”, the “casinos closure order”; and what were termed “speedy actions”.
Local govt negotiating power
Local public administration scholar Eilo Yu Wing Yat told GGRAsia he had the impression the local community thought the Macau government had adopted a “cautious” and “effective” approach in attempting to control the spread of coronavirus within the city itself.
He added: “When the time of refreshing gaming rights is near, it seems that Macau government has quite some negotiating power.”
Mr Yu noted the local government had asked the casino operators to take “several measures” in relation to the virus episode and they had “complied” with these requests.
Having done so could “in future” help the casino companies to “maintain their economic interests,” said Mr Yu, an associate professor at the University of Macau.
“This could imply in future, when the [concession] renewal or new tender talks happen, the Macau government can impose conditions [onto casino operators] requiring certain compliance measures in responding to cases of natural disasters, or epidemic control,” the scholar added.
Vitaly Umansky, an analyst at brokerage Sanford C. Bernstein Ltd, based in Hong Kong, noted: “The [gaming] companies are, in terms of their actions, very supportive of the government action and not raising a lot of noise.”
He added this might go a “very long way” in terms of the future relationship between the gaming operators and the local authorities.
“It is showing how dedicated these companies are to Macau and dedicated to having Macau continue to thrive and show that they are probably the best partners to have in Macau for this industry.”
The analyst suggested that the downturn brought by the coronavirus epidemic was likely to be “temporary” and would not hurt Macau’s appeal to outside casino firms, should they have the chance to take part in a new public tender for gaming rights in the city.
“Every investor that we’ve talked to views this as a temporary downturn, not just for Macau but for China and everywhere else. I don’t think having the coronavirus impact and shutting Macau down for a few months, let’s say, negates anyone’s desire to be in Macau,” Mr Umansky remarked to us.
“The broader issue is: does the Macau government really want or need to have more gaming operators? That’s the bigger question,” the analyst added.
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Analyst at Roth Capital Partners