More bad news for Macau as Covid outbreak threatens Golden Week

Kat Martin Author Photo
Kat Martin
Posted on: September 28, 2021 09:39 PDT

It's been a rough 18 months for the gaming industry in Macau. Close to the Covid-19 epicenter, Macau casinos were the first to close their doors in 2020. Subsequent restrictions have continued to dampen the action at the international gambling hub. Now a new Covid-19 outbreak threatens to ruin one of the most profitable periods on the calendar: Golden Week.

Macau entered a "state of immediate prevention" after two security guards tested positive for the virus. The guards were working at a quarantine hotel. The new alert status announced by the government requires all residents and visitors in Macau to get a Covid-19 test within 48 hours.

While no new constraints have been placed on the gaming industry, travel restrictions are likely to have a major impact on business. Anyone leaving Macau must obtain a negative Covid-19 test 48 hours before departure. Perhaps more importantly, the city of Zhuhai is requiring anyone returning from Macau to undergo a 14-day quarantine. Zhuhai borders the Macau Special Administrative Region, and is a primary conduit for visitors entering Macau.

The timing of this latest outbreak could not have been worse. Golden Week, which celebrates the establishment of the People's Republic of China, runs October 1-7. Industry analysts anticipated that this major holiday would produce hotel-casino occupancy rates as high as 90%. Estimates have now been slashed to 50% at best.

More money, more problems

Macau has changed drastically since the 1970s, when the Casino Macau Palace was immortalized in the James Bond movie "The Man With The Golden Gun". The water-bound casino was once a major property in the area, but has since been dwarfed by massive hotel-casino resorts, many of which are owned by U.S.-based interests.

While U.S. corporations have profited handsomely from the Macau market, their relationship with the Chinese government continues to be tense. One current area of concern for the gaming industry is the reform of gaming license regulations. Market jitters over the consequences of these reforms triggered a recent crash of stocks in the Macau gaming sector. While prices have subsequently recovered, this latest Covid-19 disruption is the last thing the industry needs.

Somewhat ironically, one of the first casualties of the new Macau travel restrictions was a public consultation session, due to be held by Macau’s Gaming Inspection and Coordination Bureau. The key topic on the agenda was the renewal process for gaming licenses.

A contrast to Las Vegas and the WSOP

It is striking to compare the response to two new Covid-19 cases in Macau with the current situation in Las Vegas, due to host the WSOP in two days time.

The latest data released for Nevada, covering the three days of September 24-26, reported 2,000 new Covid-19 cases and 30 deaths. And yet thousands of poker players are about to assemble at the Rio.

Featured image source: Twitter