Macau Casino Giants See Shares Drop 9.4% On Average Amid China COVID-19 Spike

  • The biggest casualty was SJM Holdings with shares falling 10% by Monday noon
  • Travellers from certain mainland China areas now have to quarantine seven to ten days
  • A consultant said Macau is getting “more same-day visits, but not the longer-staying players”
  • The gambling hub’s 2021 casino revenue fell 70% from pre-pandemic levels
Macau city skyline
Shares for three of Macau’s major casino operators fell an average of 9.4% with the introduction of new quarantine rules for travelers from mainland China. [Image: Shutterstock.com]

Tightened quarantine rules

Shares for three of Macau’s six casino giants have plummeted an average of 9.4% after the Hong Kong government applied tighter quarantine rules for travelers in response to a spike in COVID-19 cases on mainland China.

shares at Sands China had dropped 9.2%

On Monday, MarketWatch reported that shares at Sands China had dropped 9.2%, while Melco International Development’s fell by 9.1%. The biggest casualty, however, was SJM Holdings, down 10% at HK$3.28 (US$0.42). It marked the firm’s heaviest one-day percentage dip in half a year.

The fall in share prices followed the announcement Sunday by Macau’s Novel Coronavirus Response and Coordination Center of a seven to 14-day quarantine for certain travelers arriving in Macau. It applies to arrivals from the Chinese cities of Zhongshan and Shenzhen, as well as the areas of Guangzhou, Yangjiang, and Dongguan.

Pressure mounting

Founder of Macau-based consultancy iGamiX, Ben Lee, described how the Macau health authorities’ new restrictions will add to the gambling mecca’s visitation woes. “We are getting more same-day visits, but not the longer-staying players,” Lee told MarketWatch.

The biggest fear for Macau’s casino operators still nursing wounds after two years of reduced visitation is the potential for border closures if the virus breaks out again in the gambling hub.

AllianceBernstein’s managing director and senior analyst of global gambling, Vitaly Umansky, has noted “a significant reduction in travel within China in recent weeks.” The analyst said those numbers could drop further “as Beijing advises citizens against traveling.”

According to MarketWatch, the latest COVID-19 outbreak in China has also seen authorities mandate a lockdown in the manufacturing and technology center of Hong Kong’s near neighbor Shenzhen. Expected supply chain disruption adds to the market’s uncertainty.

Beijing has also imposed a lockdown on Shanghai, as the country combats its worst outbreak of COVID-19 in two years, with almost 3,400 daily cases reported Sunday.

Uncertain future ahead

At the end of February, Macau’s Novel Coronavirus Response and Coordination Center introduced a quarantine measure for travelers arriving in the casino hub from Hong Kong.

In the past, visitors from Hong Kong have accounted for around 15% to 20% of business for Macau’s six casino operators, which include Wynn Macau, MGM China, and Galaxy Entertainment.

the figure was still 70% down on pre-pandemic levels

The news of a new mainland China quarantine is not what Macau casino operators, hoping for a 2022 comeback, will want to hear. While Macau 2021 gaming revenue saw a 44% improvement year-on-year, the figure was still 70% down on pre-pandemic levels.

To make matters worse, New York Times diplomatic correspondent Edward Wong took to Twitter Monday to warn of the “big impact” China’s new COVID-19 fallout could cause on a global scale: