SINGAPORE — As authorities battle to contain the worst coronavirus outbreak to date in the world’s largest gambling hub, Macau shut down all of its casinos for the first time in more than two years on Monday, sending shares in gaming firms tumbling.
People were told to stay at home during the closure of the city’s more than 30 casinos and other businesses, though brief trips for absolutely necessary services were permitted.
Police will keep an eye on the crowds outside, and the government promised that anyone who disobeys will face severe penalties.
Despite the fact that many casinos have been operating with little to no staff for the past three weeks, the more extreme measures have had a significant negative impact on investor confidence. According to some analysts, the gaming industry’s revenue recovery might not occur until the third or fourth quarters.
According to the models, “We would probably need to write-off July and probably August as well,” said DS Kim, a J.P. Morgan analyst.
Shares of Melco International, Wynn Macau, SJM, Galaxy, and MGM China all fell between 6 and 7 percent. Shares of Sands China fell by 9 percent.
Since the middle of June, Macau has tallied about 1,500 COVID-19 infections. As the government upholds China’s “zero-COVID” policy, which runs counter to a global trend of trying to coexist with the virus, and aims to eradicate all outbreaks, approximately 19,000 people are required to remain in mandatory quarantine.
More than 30 high-risk areas of the city are currently in lockdown, which prevents people from entering or leaving for at least five days. Even though the government insisted there would be no city-wide lockdown, the strict regulations effectively shut down Macau.
The last time casinos in Macau were closed for 15 days was in February 2020. In the past, the government has been hesitant to shut down casinos because it has a duty to safeguard jobs. More than 80% of government revenue comes from this sector, which directly and indirectly employs the majority of the population.
The government’s handling of the outbreak is causing growing frustration. While some residents waited in line for more than 20 hours to access healthcare facilities, fights have broken out at testing facilities.
Four times this week, residents will be required to participate in large-scale COVID-19 tests. Since mid-June, they have already undergone six tests, and they are required to perform quick antigen tests every day.
The 600,000 people who live in Macau have more than 90% of the required COVID-19 vaccinations, but this is the first time the city has had to deal with the quickly spreading Omicron variant.
As part of their efforts to increase capacity to handle the rise in infections, authorities have added two hotels in well-known casino resorts for use as COVID medical facilities.