COVID-19 Testing in Macau Brings Unexpected Consequences

For more than a year, Macau did not have a single positive COVID-19 case. However, after four people tested positive with the Delta COVID-19 variant this week, the local government initiated mass testing. Reportedly, the testing resulted in a spike of players and employees leaving Macau, as well as a decrease in gaming stocks.

Mass COVID Testing Starts in Macau, New Cases Recorded

Earlier this week, Macau’s government announced that it plans to test more than 600,000 people for COVID-19 at 41 testing sites. The news came after four individuals tested positive for the Delta variant of the virus. Before those four cases, Macau has kept a record for staying COVID-free for more than 16 months. With that in mind, since the start of the pandemic last year, only 59 positive COVID-19 cases were recorded in Macau so far, and no patients have deceased.

Besides Macau, COVID-19 is also taking place in mainland China following the outbreak of the Delta variant in Nanjing. Although casinos in Macau were closed briefly last year, for the moment, they are allowed to continue operating. However, other businesses such as bars, theaters, cinemas and nightclubs were forced to close this week.

The Testing Brings Financial Difficulties, Workers and Employees Go Back to Macau

According to a recent note by Credit Suisse, released by Inside Asian Gaming, the current situation in Macau may impact the Q3 2021 financial results. Although last month the traffic in Macau was already impacted due to China’s travel restrictions, that trend may continue over the next two weeks, according to the report. The negative effect related to restrictions in Macau and China may also result in further “earnings downgrades,” reveals the report.

Additionally, the report unveiled that the COVID-19 testing in Macau has pushed players to go back to mainland China over fears that the country “may become a medium risk area.” Credit Suisse analysts Kenneth Feng and Lok Kan Chan revealed that besides players, employees are also leaving Macau over fears that they may be quarantined when returning to China.

Besides players and employees returning to mainland China from Macau, the COVID testing led to stocks plummeting. According to Reuters, the start of the testing in Macau coincided with a decrease in gaming stock prices in the country. As a result, Galaxy Entertainment’s stocks fell by 6.3% to $6.02 (HK$46.85). This marks their lowest recorded point since April 2020. Moreover, SJM Holdings’ stocks hit their lowest point since March 2020, dropping by 7.2% to $0.80 (HK$6.22). With that in mind, the most significant drop in gaming stocks affected Wynn Macau. The company’s gaming stocks reached their lowest point since March 2016 by dropping with 9.4% to $1.13 (HK$8.80).