Macau casinos go on lockdown

Macau’s casinos will have to discontinue operations as they did this morning when no property in the special administrative region opened doors for business. This is the result of a Saturday decision issued by the Macau government which ordered concessionaires to keep their gaming properties shuttered at least until July 18 as the region is faced with one of its worst outbreaks of COVID-19.

The outbreak began in early July and quickly progressed through the SAR, putting pressure on local authorities to comply with China’s zero-COVID policy. While authorities tried to keep casinos open, the fact that no tourists were coming through the borders only added to their operational woes. This comes at a delicate time for casinos as well because the government also expects concessionaires to continue to pay their workers even if they are shuttered.

Casinos have been preparing for rumored shutdowns for at least two months now with many possible scenarios being floated. Meanwhile, the Secretary for Administration and Justice André Cheong Weng Chon said that casinos will remain shuttered until next Monday when a reevaluation will be done to see if the properties can reopen.

Before they were closed, casinos were running at 10% of their staff and operational capacity. While this was a good way to immediately mitigate the effects, it was hardly any help since there were no visitations to Macau. China is unlikely to reopen the border either. Under the zero-COVID policy, the borders may only be reopened provided that there have been no new cases for the past 14 years. This will be a tall order for the SAR to achieve.

Meanwhile, any travel to and from Macau will be limited as well. There will be only 3,000 bus trips for essential workers, while everyone else is urged to stay home. The measures are of course impacting not just the casino industry but have paralyzed public life in the special administrative region. It seems that this time around, concessionaires may not need to pay salaries to their employees during this ad-hoc lockdown, but a solution should be reached.

Some concessionaires are asking people to take either paid or unpaid leave, while others are opting to pay. Liquidity is not a problem for most properties in Macau which have enough to last for at least 1.5 years without new revenue. SJM and Sands Macau, though, seem to be a little tighter in terms of money.

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