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Casino stocks fall as Macau takes coronavirus hit Poker
Gutshot Editorial
Posted on 29 Jan, 2020
By Gutshot Editorial
On 29 Jan, 2020
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By Gutshot Editorial
On 29 Jan, 2020
Share

Casino stocks fall as Macau takes coronavirus hit


The Lunar New Year is typically celebrated in China and other Asian countries that basically begins with the first new moon until the first full moon of the lunar calendar. And with the deadly outbreak of coronavirus in the holiday season, several US casino operators have confirmed readiness to comply should the Chinese government order a temporary shut-down as the virus has already infected over 600 people worldwide.

The virus has finally reached Macau where two deadly cases have been confirmed by now. The year 2020 started with Macau’s tourism industry turning to be a major setback as the visitors are put off by the rapidly spreading coronavirus epidemic that originated in the central Chinese city of Wuhan. Being one of the largest gaming markets and an international hub globally attracting tourists, Macau’s new year is the biggest source of revenue for the gaming hub as each year the sector generates million worth of cash, drawing players from worldwide.

The Chinese securities sank as investors grew concerned that the country’s Lunar New Year holiday could worsen with the spread as millions of Chinese nationals travel domestically and abroad. Macau’s Chief Executive Ho Lat Seng issued an order to ban all festivities and further noted that the casinos might be suspended until after the coronavirus has been contained.

Ron Reese, Las Vegas Sands spokesperson followed Seng’s statement and stated that the company was working closely with officials to determine the best course of action“We are prepared to follow any additional protocols or guidance as they are made available.” The MGM Resorts which operates MGM Macau and MGM Cotai are looking into the issue and making sure the overall security and hygiene of the properties to protect the visitors.

In 2019, gaming revenue deteriorated by 3.4% for the first time since 2016. The stocks of casino operators fell as much as 1.35% for Las Vegas Sands 1.3% in Wynn (WYNN) and 3.6% for Melco Resorts (MLCO), following Seng’s statement on Thursday.

Mainland Chinese visitors making the bulk of tourists, were down 88.5 percent on Monday, the fourth day of the Lunar New Year holiday period compared to a year earlier, rapidly falling from 38 percent, 64.7 percent, and 79.6 percent over the first 3 days. Overall mainland tourist numbers were 75.1 percent lower over the first 4 days, according to data from the Macau Government Tourism Office. Investment bank Jefferies said in a research note that the lower numbers would be “negative” for gaming stocks as casinos’ revenue is closely tied to visitor levels. According to a research note issued by Sanford Bernstein on Friday, over the past 3 years, 17 days surrounding the seven-day holiday in mainland China contributed around 5 to 5.5 percent of annual gross gaming revenue in Macau.

Seng said that, given the experience of Severe Acute Respiratory Syndrome (SARS), if the situation is so serious, no-one will go to a casino.” On Sunday, the Macau government announced that anyone from Hubei province who had visited the province in the last 14 days, would not be allowed into Macau. For the latest updates on poker news and industry, keep reading GutshotMagazine.com and stay tuned!

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