Gambling Stocks Plummet With Macau Casino Closures
News that the world's largest gambling hub, Macau, will suspend almost all business activities for a week starting Monday July 11 in a bid to control a rising number of new Covid-19 infections has sent gambling company shares spiraling.
The city’s six licensed casino operators fell 5.5%. As a whole, they are down 20% this year. Sands China Ltd. fell as much as 8.2% on Monday with Wynn Macau Ltd. dropping 6.7%.
Essential services such as water and gas utilities as well as businesses including supermarkets, pharmacies and hotels will remain open.
Service workers will be required to take PCR tests on a daily basis during the seven-day shutdown.
Some 30 casinos were slated to be shuttered for at least a week as over 30 zones in the city have been declared high risk and are now under lockdown.
Macau adheres to China’s “zero-Covid” policy in an effort to eradicate localized outbreaks.
Analysts worry that the closures could extend beyond this week and that a full recovery in gaming revenue will not be realized until the third or fourth quarter.
“Even if the outbreak in Macau gets under control, it will likely be another few weeks before Macau-Zhuhai can remove quarantine requirements,” said Terry Ng, an analyst at Daiwa Capital Markets in Hong Kong.
- Aaron Goldstein, Gambling911.com
