Employees and croupiers circulate, cleaning and disinfecting the tables, now further away from each other to reduce the risk of contagion by coronavirus . At the entrance to the playing spaces, the obligation for everyone to undergo a temperature measurement. But, a week after the introduction of new restrictions, players in Macau casinos don’t even see them.
Operators had continued to have “minimum revenue,” Ben Lee told PLATFORM. This is thanks to players from the continent, using individual or business visas issued before the suspension, or from Hong Kong, explains IGamiX Management, managing partner. and Consulting Ltd IGamiX .
The situation went from bad to worse last week. On Tuesday, the Macau government imposed a 14-day quarantine on anyone coming from Hong Kong. On Friday it was the turn of neighboring Guangdong province to announce that anyone – including local residents – from Macau and Hong Kong would have to be quarantined.
“Casino revenue most likely dropped to zero,” says Ben Lee. According to official figures, 45.9 percent of visitors who arrived in Macau in 2019 came from Guangdong.
Since Friday, “there have been periods when we have not registered any bets”, confirms to PLATAFORMA the executive of a company that operates a casino in Macau, who requested anonymity because he was not authorized to speak to the press.
Flies rooms
Macau hotels had already seen the average occupancy rate plummet. Last week, Wynn hotels had an occupancy of only 20 percent, an employee of the hotel sector tells PLATAFORMA, who requested anonymity because he was not authorized to speak to the press. “And it will only get worse,” he adds.
“The few reservations that were left were all canceled on Friday”, as soon as the new restrictions imposed by Guangdong were announced, says Ben Lee. Thus, the operators of the big enterprises “seem stubborn” because they do not accept to host the thousands in their hotels of people who are returning to Macau and have to complete two weeks of quarantine.
The first to take this step was Sands China, which on Saturday provided half of the 4,000 rooms at the Sheraton Grand Macao hotel in Cotai.
The compensation offered by the Government “is always better than nothing; not to mention the fact that it is a real contribution to community efforts” in combating the second wave of coronavirus cases , considers Ben Lee. “As the Government says, no enough to donate a few masks “, adds the veteran of the game industry.
Cuts and debts
Game operators have been trying to cut costs by offering local workers half-paid leave, says the hotel official. “I don’t know what the level of interest has been” in this proposal, adds Ben Lee.
Only there have been no redundancies between the locations, admits the executive of the casino operator, because companies are afraid of the impact that this may have in an eventual renewal of the gaming licenses, which end in 2022.
He admits that less fortunate non-resident workers were. According to official figures, Macao companies laid off more than 5,100 non-resident employees in the first months of this year, with almost 700 working in restaurants and hotels.
One solution that could “make a big difference,” suggests Ben Lee, is to cut salaries by the top executives at gaming companies. The move has already been taken by Genting , the group that manages casinos in Malaysia and Singapore, and by Suncity , the most important intermediary in the VIP gaming sector in Macau.
Ben Lee believes that companies like Galaxy Entertainment and the Macau Gaming Society ( SJM ) will escape the crisis. On the contrary, operators “at greatest risk of falling into a prolonged depression” are those with the greatest debt, says the analyst.
The managing partner warns that companies will have to continue paying loans that, in many cases, include criteria related to revenues. Precisely to avoid technical bankruptcy, last week Sands China was able to negotiate changes to the criteria for a loan, something MGM China also requested from creditors.
In the United States … Wynn and Sands have reservations for another year
The analyst Chad Beynon , from the Australian financial company Macquarie , estimates that the North American groups Wynn Resorts and Las Vegas Sands – strong presence in the game in Macau – have money to face the pandemic 15 to 20 months. Estimate made following the 30-day closure of all operators in (Las Vegas), by order of Nevada Governor Steve Sisolak . Macquarie warns that Covid-19 is a harsh test of the cash reserves of major US gambling companies.
Game goes wild in March
Gaming revenues in Macau fell 79.7 percent in March, compared to the same month of 2019. The borders of the world gaming capital were almost entirely closed during this period to contain the Covid-19 outbreak .
Data from the Games Inspection and Coordination Department ( DICJ ) also indicates a 60 percent drop in the first quarter of the year. February had recorded historical losses in revenues, due to the closing of the casinos for 15 days.
In March 2019, operators raised 25.84 billion patacas. This year, gross revenue for the same month was MOP5.25 billion.
In the quarter, the overall amount generated was 30.48 billion patacas, 45.66 billion patacas less than in the first three months of 2019. Macau casinos closed 2019 with revenues of 292.46 billion patacas .
