Macau Casinos Face Fresh COVID Troubles as Outbreak Leads to Mass Testing

  • The population of about 600,000 people will undergo testing between Sunday and Tuesday
  • Most businesses in Macau have closed as a result of the outbreak, but not casinos yet
  • Borders with mainland China remain open but travel restrictions have tightened
  • It does not appear that the outbreak will impact a vote on new gaming legislation on Tuesday
Health officials in protective suits
Macau is mass testing its population as a result of a new COVID-19 outbreak, with casino revenue set to take a hit. [Image: Shutterstock.com]

A significant testing effort

Mass COVID-19 testing is now taking place in Macau amid a fresh outbreak of the virus. The procedure, which will see the gambling hub’s 600,000-strong population undergo testing, began on Sunday and is to last until Tuesday.

Following a flurry of positive test results over the weekend, the majority of businesses in Macau had to close their doors. The main exception is casinos, however, which have remained open.

following mainland China’s zero COVID approach

The world’s biggest gambling hub is following mainland China’s zero COVID approach in an attempt to aggressively combat any outbreaks. Authorities have told residents to mainly stay at home and have tightened travel restrictions. Despite casinos staying open for now, analysts expect their revenue to dwindle for a number of weeks.

Shares of Macau casinos dropped on Monday, with most of the major operators seeing prices fall by 4-7%. Macau is heavily reliant on casino revenue, with more than 80% of the special administrative region’s income coming from the gambling sector. It is also the main type of employment in the region.

Ongoing issues

Macau has seen a sudden rapid spread of COVID, according to its chief executive Ho Iat Seng. The last significant COVID-19 outbreak in Macau was in October. Since then, Hong Kong and mainland China have both experienced major outbreaks. This has affected casino revenue due to travel restrictions.

By Sunday afternoon, the number of confirmed COVID-19 cases in Macau had reached 21.

With just a single public hospital in Macau, officials are concerned about potential pressure on the facility if the outbreak worsens. There is currently no plan to close the border between Macau and mainland China, with a number of casino workers living in the nearby Chinese city of Zhuhai. However, mainland China’s borders remain closed to Hong Kong due to high case numbers in the special authority region.

Uncertainty for casinos

The COVID situation creates even more uncertainty for Macau casinos already facing the rollout of new gaming legislation and the tender process for concessions. New laws in the works would put stricter controls in place on casinos. The Legislative Assembly is to have a second reading of the legislation on Tuesday, followed by a final vote. As of Sunday afternoon, there were no plans to postpone this.

concerns regarding the short-term fortunes of the gambling sector

The region’s casino licenses were due to expire in June, but operators have received a six-month extension. With casino revenue consistently below pre-pandemic levels, experts have raised concerns regarding the short-term fortunes of the gambling sector. Morgan Stanley noted the issues with casino liquidity last week, which has forced Wynn Macau to get a $500m credit facility from its parent company.