HONG KONG: In the glitzy dealing rooms of Macau’s silenced casinos, the house is down billions of dollars, but can’t afford to fold its hand in the world’s biggest gambling game.
A COVID-19 outbreak has meant full-scale closure for the former Portuguese colony’s six casinos – the only places in China where gambling is legal. Even prior to their closure on July 11, analysts estimated the casinos were burning through some $600 million each month because of COVID restrictions.
Gambling centres around the world like Las Vegas, a sixth of Macau’s size in revenue, are cranking up business as years of COVID curbs fade. But Sands China (1928.HK), Wynn Macau (1128.HK), MGM China (2282.HK), Galaxy Entertainment (0027.HK), SJM Holdings (0880.HK) and Melco Resorts face zero revenue for the near future in locked-down, Chinese-ruled Macau – and their operators’ contracts expire at the end of this year.
Having invested billion in Macau over the last two decades, they are soaking up losses as they prepare to bid for new licenses by next month in a business that generated $36 billion in revenue in 2019, the last year before COVID curbs slammed the sector.
“They (casinos) have to play the long game. It’s just a matter of recovery when it starts again,” said Alidad Tash, managing director of gaming consultancy 2NT8.
“The sad part is that it’s going to be years until business comes back to where it used to be.”
Desperate to get new licences – and soldier on financially in the meantime – the casinos are in some cases seeking loans from U.S. parent companies. They are also trying to showcase their role in society in Macau, where the industry accounts for more than 80% government tax income, by not firing tens of thousands of staff with no gamblers to deal cards to or otherwise serve.
Macau’s gambling revenue surges 135.6% in February
Not legally required to pay staff during a mandated closure, casinos have nevertheless continued to do so. Operators have also tried to burnish their social responsibility credentials by supporting local businesses and offering use of their hotel rooms for quarantine.
Casino operators and the Macau government did not respond to requests for comment.
The closely watched casino license rebidding process comes amid Macau’s worst coronavirus outbreak, with the government shutting down casinos for the first time on Monday in more than two years and locking down the city.