The upcoming Golden Week holiday period was supposed to provide Macau with an injection of much-needed revenue. The city and its casinos have been looking forward to this time of the year as a means to show that it has gotten COVID-19 under control. However, it apparently hasn’t and this spells disaster for Macau’s recovery efforts. As of now, half of the planned trips to the city during Golden Week have already been canceled.
Macau Scrambles Once Again to Face COVID-19
Macau’s efforts to rebuild after a disastrous 2020 because of COVID-19 have been a complete roller coaster ride. July was good month for the city, but August saw a drop. September initially had some leveling out until the new draft gaming laws were presented. That caused a massive loss of $18.4 billion in gaming stocks within a 24-hour period, and Macau is now facing a new issue. Two new COVID-19 cases were announced this past Saturday and both were from security guards working at a quarantine hotel.
Macau is now scrambling and has introduced a “state of immediate prevention” to try to prevent another major outbreak. Mass COVID-19 testing is underway and anyone traveling to mainland China’s Zhuhai city from Macau this week will have to undergo 14 days of quarantine. Macau reports that 427,000 had been completed by Sunday night, with no further cases identified, but the damage is already done.
New Problems Put the Brakes on Travel
According to analysts from Credit Suisse, “40-50% of players have cancelled their trip, on concerns that the situation could drag on longer than expected and they may need to be quarantined upon return to China. In fact, we have heard that several players have faced mandatory quarantine on return to China from Macau over the past few days.” When four people tested positive early last month, Macau suffered its lowest gross gaming revenue since September of last year.
JP Morgan analysts have a similar view to that of Credit Suisse’s analysts. They assert, “While there’s still a possibility that travel restrictions could be lifted before or during Golden Week, we think it’s a foregone conclusion that it will be an un-golden holiday as many players are likely to cancel the trips to avoid risks of being quarantined upon their return to [the] mainland.” They added that the Macau gaming sector is now “uninvestible,” pending better clarification of how the city is addressing COVID-19 and its gaming laws.
Gaming Law Changes to Face Delays
Macau is in the process of updating its gaming laws, with the industry closely watching how everything unfolds. The recent release of draft rules caused some initial panic, but seasoned executives know that the final version of the rules is what ultimately matters. The Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) has a 45-window open to allow feedback and had prepared four public meetings to receive feedback about the proposed laws. One was supposed to take place this Wednesday, but not anymore.
As Macau struggles to keep COVID-19 away, the upcoming meeting was canceled. It isn’t clear whether this will delay the rollout of the new rules, as the meeting was to be conducted only in Portuguese and Chinese. The other three scheduled events are still on the calendar and should be held on October 9, 13 and 19 unless COVID-19 continues to exert its will over the city.