Macau closes all its casinos to curb COVID, gaming stocks plummet

Residents with face masks stand in line to be tested for coronavirus (COVID-19) in Macau, China July 4, 2022. REUTERS / John Mak

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  • More than 30 zones across the city are locked
  • Four rounds of mass testing of covid are planned this week
  • Macau’s casinos have been closed for several weeks

HONG KONG, July 11 (Reuters) – Macau closed all its casinos for the first time in more than two years on Monday, causing shares in gaming companies to fall as authorities struggle to curb the worst coronavirus outbreak to date in the world’s largest gambling center.

The city’s 30-plus casinos and other businesses will close for a week, and people were ordered to stay home even though short trips for important services were allowed.

Police will monitor the flow of people outside and severe penalties will be imposed on those who do not obey, the government said.

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Although many casinos have in practice been closed for the past three weeks with only minimal staffing allowed, the more drastic measures hit investor confidence hard. Some analysts predicted that a possible increase in gaming revenues could not occur before the end of the third quarter or during the fourth quarter.

“We will probably need to write off July and probably also August from the models,” said DS Kim, an analyst at JP Morgan.

The shares of Sands China (1928.HK) fell 9%, while the shares of Melco International (0200.HK), Wynn Macau (1128.HK), SJM (0880.HK), Galaxy (0027.HK), MGM China (2282 ) .HK) fell between 6% and 7%.

Macau has registered around 1,500 COVID-19 infections since mid-June. Around 19,000 people are in mandatory quarantine as the government adheres to China’s “zero-COVID” policy aimed at eradicating all outbreaks, which is contrary to a global trend of trying to coexist with the virus.

More than 30 zones in the city that have been considered high risk are now under locked, which means that no one is allowed to enter or leave for at least 5 days. While the government said it did not impose a city-wide blockade, the strict measures mean that Macau is in fact closed.

Casinos were last closed in Macau in February 2020 for 15 days. The government has previously been reluctant to close casinos due to its mandate to protect jobs. The industry employs most of the population directly and indirectly and accounts for more than 80% of central government revenue.

Frustration is growing over the government’s handling of the outbreak. Fighting has broken out at test centers while some residents have had to stand in line for more than 20 hours to gain access to health services.

Residents will be required to participate in massecovid-19 tests four times this week. They have already been tested six times since mid-June and are expected to perform rapid antigen tests daily.

More than 90% of Macau’s 600,000 inhabitants are fully vaccinated against COVID-19, but this is the first time the city has had to contend with the rapidly spreading Omicron variant.

Authorities have added two hotels in popular casino resorts to be used as medical facilities for COVID-19, as they try to increase their capacity to deal with the wave of infections. read more

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Reporting by Farah Master; Edited by Stephen Coates and Edwina Gibbs

Our standards: Thomson Reuters Trust Principles.

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