For some days now, China has made headlines all over the world due to a health scare. At the moment, there is a worrying Coronavirus epidemic raging around the city of Wuhan, to the west of Shanghai. This epidemic is having quite an impact on the cash gaming industry in Macau. What can the link between this illness and Macau’s casinos be?
We will find the answer in this article.
The world cash gaming capital
In the middle of the 2000s, Macau’s government authorised foreign companies to open casinos on its territory. The largest groups in the sector worldwide (such as Las Vegas Sands, Melco Crown Entertainment and MGM Resorts International ) built immense leisure resorts based on cash games there. Aimed at Chinese High Rollers, these gigantic complexes quickly made huge amounts of money, which made Macau the world’s largest gaming capital, way ahead of Las Vegas!
The major importance of the Chinese clientele
The Chinese come in great numbers and are very fond of cash games. So after High Rollers, the region’s casino complexes started to attract the Chinese public. So in brief, the flourishing financial state of health in Macau’s casino industry is completely dependant on clients from China. So when this is drastically reduced, the whole sector is badly hit, as we can confirm right now.
An 80% drop in Chinese visitors
The first day of the first month of the Chinese New Year, the Chinese New Year in an important date in Chinese culture. Many travel during this holiday period and may for example go to Macau to enjoy themselves. This year the Chinese New Year fell on the 25th of January 2020. The Coronavirus appears to have had a major impact on Macau’s cash games economy. The destination attracted 80% fewer Chinese visitors than last year on the third day of the Chinese New Year : an important time of the year.
Even worse, it doesn’t seem as if the situation will improve in the near future because the government has decided to limit travel to try to contain the virus. In addition, on the 23rd of January, the leader of Macau even mentioned the possibility of temporarily closing all the casinos in the region. Recently published figures from the Gaming Inspection and Coordination Bureau showed a decrease in revenue over the whole year. With this Coronavirus, the year is off to a very bad start. So can we expect catastrophic results for 2020? Only time will tell…