The world’s largest gambling hub Macau started its second day of mass COVID-19 testing on Monday after a batch of locally transmitted cases were detected over the weekend, with many businesses closed but casinos were left open.
The testing of Macau’s nearly 600,000 residents is hoped to finish on Tuesday as the Chinese-ruled former Portuguese colony complies with China’s “zero COVID” policy seeking to put an end to all outbreaks at just about any cost.
Many residents were urged to remain at home, restaurants were closed for dine-in and border restrictions have been tightened, meaning casino revenue is likely to be almost zero for at least a week and in the weeks to come, analysts said.
Shares of Macau casinos plunged on June 20 morning with Sands China (1928.HK) leading the fall dropping over 8% the biggest slump since March 15.
Wynn Macau (1128.HK), Melco (0200.HK), MGM China (2282.HK), Galaxy Entertainment (0027.HK), and SJM Holdings (0880.HK) fell between 4%-7%.
Macau’s government depends on casinos for more than 80% of its income, with the majority of the population working directly or indirectly in the casino industry. The most recent outbreak happened abruptly and has been escalating rapidly with the source still undiscovered, Macau’s chief executive Ho Iat Seng said in a statement on the government’s website.
Macau’s last coronavirus outbreak was in October 2021. An outbreak in the bordering Chinese territory of Hong Kong this year saw over 1 million confirmed infections, and over 9,000 deaths, flooding hospitals, and public services.
While Hong Kong has witnessed a rise to over 1,000 daily cases in the previous week, officials have said they are not likely to additionally tighten restrictions as the pressure on medical services has not mounted.
Macau only has one public hospital and its services are currently stretched daily. The territory’s immediate plan to test its whole population occurs as it holds open the border with mainland China, with most residents working and living in the neighboring Chinese city Zhuhai.
China in comparison has not opened its borders to Hong Kong, with the financial hub mostly cut off from the mainland and the international world. Macau’s legislature is this week required to pass a revised gaming law that will provide conditions for what is needed from the multibillion-dollar casino operators to remain in operation.
Vitaly Umansky, an analyst at Sanford C Bernstein, stated:
“Depending on how quickly Macau can get the newest outbreak under control, there is the risk of delay to finalization of the gaming law amendments and subsequent concession tender process.”