Posted on: March 14, 2022, 08:59h.
Last updated on: March 14, 2022, 01:12h.
Macau Health authorities said Monday visitors from neighboring Guangdong province will have to serve seven days quarantine on entering the gambling hub. That’s amidst the worst spike in COVID-19 cases since China clamped down on the pandemic in early 2020.
Shares in SJM Holdings plunged 12.3% at the close of trading in Hong Kong Monday. Sands China was down 11.6%, while Melco dropped 11.5%. Shares in Galaxy Entertainment were down 5 %.
On Sunday, Beijing placed 17.5 million residents of Shenzhen, a sprawling tech hub city on the mainland’s border with Hong Kong, under lockdown. That’s after 66 new cases were detected the previous day.
As other nations resolve to learn to live with the virus, China’s government is still doggedly pursuing its zero-COVID strategy. Shanghai was also placed on lockdown, as nearly 3,400 new cases were reported nationwide on Sunday.
Containment at Cost
The new travel rules in Macau will dissuade visitation from mainland China, heaping further pressure on its casino market. The world’s biggest gambling hub is still awaiting its Las Vegas-style bounce-back, and Guangdong is its largest feeder market.
Under the previous rules, visitors from Guangdong simply had to provide a negative COVID-19 test within 48 hours of arrival in Macau.
In purely public health terms, Macau’s containment of the virus has been a success. Since the start of the pandemic, authorities in the gambling hub have confirmed just 82 cases and zero deaths. As of March 13, just one new case had been recorded in the past three weeks.
Compare that with Hong Kong, just across the Pearl River Delta, which has recorded more than 700,000 COVID-19 infections and about 4,200 deaths, most of them in the same three-week period.
Macau authorities said last week that 80% of the population was now fully vaccinated against the virus.
Worst-Case Scenario
The Beijing-led zero-COVID policy has been extremely challenging for Macau’s casino-based economy.
A gradual easing of border restrictions last year meant that 2021 was an improvement in 2020. But it was still significantly lower than pre-pandemic levels. Gross gaming revenue across Macau in 2021 totaled $10.8 billion, compared with $36.4 billion in 2019.
Vitaly Umansky, managing director and senior analyst of global gaming at AllianceBernstein, told MarketWatch there had been a significant reduction in visitors from China in recent weeks. It’s a number that is likely to fall further as Beijing advises mainland residents against traveling.
A worst-case scenario for Macau would be a significant COVID-19 outbreak that would result in complete border closures, he said.