The former Portuguese enclave, Macau boasts one of the most profitable casino gambling industries in the world with billions made yearly. However, due to the ongoing coronavirus pandemic, the Macau gambling industry has come across serious obstacles and challenges. As reported by several local news outlets, the negative impacts of the ongoing coronavirus pandemic will very soon prompt the six fully licensed and regulated casino operators to reveal their combined deficits in earnings for the second quarter.

According to the company’s officials, their combined deficits in earnings before amortization, depreciation, interest, and taxes went over $1 billion which is a massive loss. As revealed by Inside Asian Gaming, the forecast was made by the Morgan Stanley brokerage and investment company concerning the financial results from the major Macau casino operators. These include Melco Resorts and Entertainment Limited, SJM Holdings Limited, MGM China Holdings Limited, Sands China Limited, Galaxy Entertainment Group Limited, Wynn Resorts Limited, and Wynn Macau Limited.

Re-Opened Macau Casinos Struggling to Attract Customers

Back on the 4^th of February, the government of Macau decided to shutter every one of those thirty-nine commercial casinos in Macau due to the rising numbers of coronavirus infections in the country. The Macau casinos just recently re-opened, but they have been struggling to attract customers mainly due to social distancing, travel restrictions, and other safety and protection measures that are still in place.

After over two months of being closed, the Macau casinos can only expect negative financial results for the previous period alongside other negative consequences of the ongoing coronavirus pandemic which will last for months to come.  The Morgan Stanley brokerage and investment company’s main analysts Praveen Choudhary and Gareth Leung recently revealed that those six major casino operators in Macau are expected to record combined second-quarter deficits in earnings before amortization, depreciation, taxes and interested of around $1.04 billion.

According to the same analysts, the casino operator with the biggest financial losses and deficits in earnings is the Sands China Limited company with a massive shortfall of $286 million. According to Praveen Choudhary and Gareth Leung from Morgan Stanley, another company with a similar deficit of around $205 is Melco Resorts and Entertainment. According to the pair, the Melco Resorts and Entertainment Limited is about to record the worst financial result for the three last three-month period when it comes to the local casino gambling industry.

Reducing Operational Expenses

Nonetheless, both Praveen Choudhary and Gareth Leung proclaimed that these rather devastating financial results from the six Macau casino operators could also provide an important glimpse into the operators’ current operational expenses alongside other important information such as which operators had managed to reduce some of their operational costs and which portions of the expected cut remains sustainable in the longer run.

The pair also clarified that the latest financial information on the aggregated deficits in earnings for the six Macau casino operators also revealed which casino operators had been able to better manage their rising operational expenses alongside the aggregated daily rate which as estimated recent dropped by around 21% on a yearly basis to hit only around $15 million. The pair’s official statement also reads that Macau casino gambling stocks increased by around 21% in the latest quarter so they believe that the worst is behind the Macau casino operators.

The former Portuguese enclave Macau is home to many of the world’s most iconic land-based casino venues such as the Venetian Macau venue, The Plaza Macao, Casino Babylon Macau, and more. Due to the ongoing coronavirus pandemic which has directly caused many financial and social disruptions across the globe, the Macau casino industry has seen rather disappointing gross gaming revenues not only in May but also in March and April.

Travel restrictions that were implemented by the Chinese government to combat the spread of the highly-contagious coronavirus were largely to blame for disappointing gross gaming revenues of Macau casinos. As revealed by several local news outlets, Macau casinos recorded a massive 93.2% decrease in its net gross gaming revenues that hit only $220.9 million for the month of May.

According to reports released by Inside Asian Gaming and GGRAsia, official figures from the former Portuguese enclave’s gaming entity the Gaming Inspection and Coordination Bureau show that aggregated gross gaming revenues for May represent the second consecutive month in that Macau casinos had chalked up a comparable diminution of over 90%. Back in April, Macau casinos had chalked up a decline of 96.8% in gross gaming revenues which hit only $94 million.

Growing Daily Deficits

According to the same local sources, the most recent figure on the industry’s gross gaming revenues of Macau casinos showed that those thirty-nine casinos in the area have logged gross gaming revenues worth around $4.1 billion since the beginning of 2020. These rather disappointing figures represent a massive drop of 73.7% when compared to the industry’s aggregated gross gaming revenues of the same five-month period last year when the thirty-nine Macau casinos made around $15.7 billion.

What makes things even worse for the Macau casino gambling industry and its thirty-nine casinos active in the region is the industry’s growing daily deficits. According to Sanford C Bernstein Limited which is a prominent brokerage company, the industry’s comparable daily net gross gaming revenues for the month of May fell into another negative territory especially from the 18^th of May due to diminishing player bases and hold volatilities. The same brokerage institution also proclaimed that the most likely one-month-long median of around $7.1 million was around 126% lower when compared to those month-long medians of March and April.

Other Troubles for Casino Owners

The casino industry in Macau is also facing many other troubles that could not be avoided. As previously mentioned, the former Portuguese enclave is home to some of the most iconic casinos in the world such as the Casino Grand Lisboa venue. The city is also home to over 632,000 citizens. It has recorded its very first official infection with coronavirus back on the 22^nd of January.

With growing numbers of daily coronavirus infections, the government was forced to temporarily shutter all of those thirty-nine Macau casinos and the decision was made on the 4^th of February.  Even though all of the thirty-nine casinos in Macau partially re-opened on the 20^th of February after only forty-five coronavirus infections recorded, there are many travel restrictions still in place.

For instance, individuals who are traveling between Macau and Hong Kong or mainland China have to undergo fourteen days of quarantine. This means that the former Portuguese enclave was cut off from many of its regular gamblers who come from Hong Kong and mainland China back in March when the government decided to postpone its IVS or Individual Visit Scheme. This scheme allows tourists from forty-nine communities to come to Macau without being required to travel within a tour group.

Looking ahead, land-based casinos in Macau could easily recover from the negative consequences of the ongoing coronavirus pandemic once all travel restrictions are lifted. It was also reported that the very first department of Macau casinos to recover will most likely be its VIP Business.

One of the most prominent names in the casino industry, Stanley Ho Hung-sun passed away on the 26^th of May at the age of ninety-eight. He was a prominent Macau and Hong Kong businessman as well as casino magnate responsible for a number of the most iconic Macau-based casino facilities. Stanley Ho was also the chairman and founder of the SJM Holdings company which today owns and manages twenty-two Macau casinos including its flagship Grand Lisboa.

Stanley Ho was commonly referred to as King of Gambling and Godfather due to the Macau government-granted monopoly that he had on the gambling industry in Macau for almost seventy-five years. Besides founding the SJM Holdings company, Stanley Ho was also the chairman and founder of the Shun Tak Holdings company which also owned a variety of businesses including air transport, real estate, shipping, tourism, and entertainment.

Stanley Ho and SJM Holdings

Stanley Ho Hung-sun was born on the 25^th of November in 1921 in Hong Kong. He studied in Hong Kong at Queen’s College. Later on, he attended the University of Hong Kong after receiving a scholarship. Unfortunately, his college years were abruptly cut short following the World War II outbreak. Several years later, he made his very first fortune by smuggling luxury items across the country while in 1943 Stanley Ho set up his kerosene and construction company.

When it comes to his fruitful career in the casino gambling industry in Macau, Stanley Ho alongside his partners Henry Fok, Teddy Yip and Yip Hon won the public tender for the former Portuguese enclave’s gaming license back in 1961. That same year, his company was renamed to STDM or Sociedade de Turismo e Diversões de Macau.

Nine years later, the Casino Lisboa venue owned and operated by his company opened its doors. Built in the late sixties, the complex featured almost one thousand rooms before the complex was enriched with over one thousand new rooms. The company which owns and manages the property was founded fifty-eight years ago in 1962. After its gambling monopoly in Macau was broken, twenty-two of forty-one casinos are owned by the STDM firm.

Fruitful Career Which Has Spanned Decades

As previously mentioned, Stanley Ho made his first fortune by smuggling luxury goods during World War II. He started by trading goods between his home town and Macau which at the time was neutral while Hong Kong was occupied. His company STDM won the monopoly over the Macau casino gambling industry back in 1962 before being broken in 2002 when the government of Macau finally started issuing more licensing to other operators.

Today, the Sociedade de Turismo e Diversões de Macau firm is one of six fully licensed gambling operators in Macau. While it does not hold a monopoly over the industry, it has still managed to garner over fourteen percent of the local gross gaming revenues last year including a massive ten percent share of the industry’s most lucrative VIP gross gaming revenues.

Stanley Ho was definitely one of the most influential individuals in the world of casino gaming who is responsible for transforming the former Portuguese enclave into one of the most popular gambling destinations in the world. He retired from the gambling industry two years ago even though he has relinquished control over his company and related businesses some nine years ago when he suffered brain damage.

After three complex brain operations, Stanley Ho remained the most important figure in the Sociedade de Turismo e Diversões de Macau firm while three of his seventeen children Lawrence Ho Yau Lung, Daisy Ho Chiu Fung, and Pansy Ho Chiu King claimed senior positions at Melco Resorts and Entertainment Limited, SJM Holdings Limited, and MGM China Holdings Limited respectively.

As revealed several days ago, Macau casino operators have seen rather disastrous gross gaming revenues for the month of April. In fact, the thirty-nine casinos which operate in Macau saw their gross gaming revenues for the previous month massively by around 96.8% when compared to the same period last year.

The casinos’ gross gaming revenues for April hit just around $94.42 million due to the ongoing coronavirus crisis and related travel restrictions alongside other measures that were implemented by the government of Macau to prevent the spread of the highly-contagious virus strain. At the time of writing this, the COVID-19 pandemic or the coronavirus pandemic of coronavirus disease has affected over 3.5 million individuals globally while over 247,000 individuals lost their lives due to the coronavirus disease and related health complications.

The coronavirus outbreak was identified back in December last year in the Chinese city of Wuhan. It was classified as a pandemic by the World Health Organization back on the 11^th of March. Needless to say, the coronavirus pandemic has caused extreme socioeconomic disruptions globally including the largest global recession after the Great Depression which took place in the 1930s. The ongoing coronavirus crisis has also caused the cancellation and postponements of cultural, religious as well as sporting and other events alongside other negative consequences. Every single industry has been affected by the ongoing coronavirus crisis and the casino gaming industry is no exception.

Catastrophic Figures for April

Back to the Macau casino industry, it is one of the biggest, most profitable industries of this kind in the world with a number of iconic venues operating here. However, the thirty-nine casinos which are active in the area have not been immune to the rather catastrophic consequences of the ongoing coronavirus crisis and related safety measures employed such as mandatory lockdowns and travel restrictions.

According to one report released by GGRAsia, the official figures from the former Portuguese enclave’s Gaming Inspection and Coordination Bureau suggest that the casinos in the area saw a massive decline of over 85% in their gross gaming revenues when compared to the month of March when these figures hit around $658 million. This means that the gross gaming revenue figure for the four months of 2020 is around 68.7% behind the figure recorded for the same four-month period last year which was approximately $3.9 billion.

GGRAsia in its report also cited Sanford C Bernstein Limited international brokerage which declared that this extreme drop in gross gaming revenues for April had been driven by travel restrictions which are in place since March. The same international brokerage company also declared that the substantial drop in gross gaming revenues for Macau casinos in April had been also driven by disappointing hold rates. The investment company also shared that the thirty-day period had seen VIP high-roller sections within the city’s iconic casino facilities top mass-market figures with significant volatility and higher hold rates.

Estimated Visitation Also Significantly Lowered

The same brokerage company also reported that its estimated visitation into the former Portuguese enclave from areas in mainland China is lowered by around 95% when compared to the same period last year. Nonetheless, the company expects to see coronavirus pandemic-related measures including travel restrictions to start being lifted in the following several weeks. Commenting on the news, Credit Suisse AG and Kenneth Fong said that Macau’s casino gaming market will most likely bounce back quickly once the government in China starts allowing mainland China citizens to travel into Macau. Kenneth Fong also added that Macau’s casino market’s mass recovery will most likely be gradual as gross gaming revenues bounce back to 80% in the following months.

Needless to say, the ongoing coronavirus pandemic has negatively affected every single industry globally and the Macau casino industry is not an exception. The coronavirus pandemic is an ongoing pandemic of COVID-19 which is caused by SARS-CoV-2 or severe acute respiratory syndrome. The coronavirus outbreak was first identified in the Chinese city of Wuhan back in December last year. The coronavirus pandemic was classified as a pandemic by the World Health Organization back on the 11^th of March.

As estimated on the 21^st of April, there are more than 2.4 million cases of infections with COVID-19 in over one hundred and eighty-five countries. As estimated on the 21^st of April, the coronavirus disease caused over 170,000 deaths globally while more than 651,000 individuals have recovered. As with other respiratory viruses, the virus strain which causes coronavirus disease spreads among individuals during close contact usually via small droplets produced when sneezing and couching. Individuals may also get infected by touching contaminated surfaces and then touching their mouth, nose, or eyes.

Macau’s Local Government to Research the Feasibility of Betting and Social Gaming Operations

Due to the ongoing coronavirus pandemic, all of Macau’s casino facilities shut down their operations temporarily in March and they have been closed for over a month now. As of recently, in Macau, a rather prominent local academic has suggested that the former Portuguese enclave could mitigate some of the devastating coronavirus pandemic consequences by legalizing some sorts of online betting and gambling activities.

According to one report released by Inside Asian Gaming, this prominent local academic who suggested Macau’s government to legalize iGaming activities is Zhonglu Zeng who is currently professors at the Polytechnic Institute’s Gaming Teaching and Research Centre in Macau. He revealed that it may be the right time for the government of Macau to start research regarding the feasibility of licensing small-scale betting and social gaming operations.

He told several local news outlets that legalizing some forms of online betting and gambling activities in Macau will allow this area to bring in much-desired tax revenues while at the same time the former Portuguese enclave will permit its local casino operators to diversify their gaming offering and businesses. The professor’s revelation came just in the time as Macau is preparing the fundamental work for its public tender which will determine who is allowed to operate casino facilities after 2022 when those current licenses expire.

Macau Exploring Online Gaming Opportunities

Zeng said to local news outlets that the biggest concern related to legalizing online gambling and betting activities in Macau is that such activities are forbidden in the rest of China including mainland China. However, in mainland China, all other gambling-related activities are banned while the former Portuguese enclave is special as it allows gambling. In his words, Macau is rather special as it has the necessary space and means to explore growing online gambling-related opportunities that other Chinese enclaves do not have.

He also added that thanks to network security technologies, residents of mainland China could be easily blocked from accessing online gaming sites operating in Macau, so no laws are broken. He also said that even though the re-tendering of gaming licenses scheduled will not explore the possibility of legalizing online gambling opportunities, he believes that the government in Macau should take the first steps towards exploring such opportunities by starting their research and discussion.

As reported by all of the major news outlets, Macau-based brick and mortar casinos were the first to be negatively affected by the coronavirus pandemic. As a direct result of the virus outbreak in China, all Macau casinos were forced to temporarily shut down their doors for fifteen days as one of the measures employed to prevent the spread of the coronavirus outbreak in the area.

As of today, Macau-based casino operators are facing new challenges following the local government imposing entry limits to visitors to these casinos in order to minimize the spread of the coronavirus. In late March, Macau’s officials and the government announced that they have decided to bar entry to all visitors to Macau casinos who are not residents of Macau and to those who have visited other countries in the previous two weeks.

New Measures to Minimize Spread of the Coronavirus

Very similar restrictions related to visitor entry limits to casino facilities were imposed on all international arrivals just last week, but visitors from Taiwan, Hong Kong, and mainland China had not been included in these measures. However, Macau’s government has been forced to employ new measures and to act quickly after it was confirmed that several new cases of COVID-19 were brought into this area of China.

As reported, these new COVID-19 infection cases were brought by individuals who had contacted the highly-contagious virus outside of the special administrative region of China. Before Macau’s government employed these measures, Hong Kong announced that it will employ similar restrictions concerning international arrivals including visitors from Macau. As of late March, returning residents of Macau, as well as residents of Taiwan, Hong Kong, and mainland China who have visited any foreign counties in the past fourteen days, have to spend fourteen days in quarantine after arriving in Macau.

Eight Hotels Turned to Temporarily Medical Facilities

Residents of mainland China who have not visited other countries including Taiwan and Hong Kong will have to undergo medical checkups at facilities that are operated by Macau’s government. Moreover, Macau’s government also announced that the Grand Lapa Hotel will act as a temporary medical facility for observing patients infected by the virus and for observing those who may be infected.

This temporary medical facility or the four hundred and the thirty-five-room hotel is actually the eighth venue of this kind to be designated by Macau’s government as a medical facility which brings the number of rooms at the disposal for treating COVID-19 patients to almost two thousand and two hundred. All of these two thousand rooms are used for treating critically-ill COVID-19 patients who have developed serious complications such as pneumonia.

Commenting on the news about entry limits to visitors to casinos in Macau, chief executive for the region Ho Iat Seng decided to cast some shade at hotel facilities who had not offered their hotel rooms for medical use despite the fact that Macau’s government is willing to pay the full room fees. He said that the government does not want to utilize hotel venues in those integrated resorts until necessary and until the last minute, but it is really challenging to deal with the shortage of medical facilities today. He also added that the government would appreciate every hotel that agrees to give its space for medical purposes.

Local authorities in Macau have instituted a series of measures which will help the authorities insulate the area from the outbreak of a coronavirus which has so far claimed over eighty lives in China while almost three thousand people are infected. According to one report released by The Straits Times newspaper, this previously unknown, highly-infectious virus was first reported in the city of Wuhan late in December last year.

This highly-infectious virus causes infected victims to develop symptoms that are very similar to pneumonia including breathing difficulties, coughs, shortness of breath and fever. 2019 Novel Coronavirus, also known as 2019-nCoV, belongs to a coronavirus strain which was identified as the cause of the most recent outbreak of severe respiratory problems. Early on, many of the victims in the outbreak in the city of Wuhan had some connection to a massive animal and seafood market in this city which suggests animal-to-human spread.

Nonetheless, a growing number of victims of the virus have not had any exposure to these seafood and animal markets which indicates that the spread of the virus from a person to a person is also occurring. According to the Centers for Disease Control and Prevention or CDC, the most recent virus outbreak in China is closely monitored. The outbreak has resulted in almost three thousand confirmed cases and this number is rapidly growing with confirmed cases found outside of China including the United States, Japan, Australia, and several other international locations.

Previous Measures Employed in Macau

As reported two weeks ago, health officials in the Macau Special Administrative Region have taken certain steps to combat the most recent outbreak including installing body temperature monitors at certain public spaces including entry points at land-based casinos in the area as well as entry points at the Portas do Cerco border and Macau Ferry Terminal.

With the count of infected individuals growing every day, Macau health officials have decided to fight this outbreak by employing a series of further measures besides installing body temperature monitors. According to the area’s health officials, the staff at every one of Macau’s forty casinos must wear protective face masks. Moreover, the staff at casinos in the area also must institute schemes that require every single arriving visitor to provide information for a health declaration form.

Authorities in the area have also revealed that they will more regularly clean different public spaces such as bus stops and taxi stops alongside other measures including installing body temperature monitors. As reported by The Straits Times newspaper, the new measures were revealed shortly after Macau identified its very first victim of the most recent virus outbreak.

The identified victim is a fifty-two-year-old businesswoman who had visited Wuhan several days ago via train. It was also revealed that the virus victim has stayed at the Macau New Orient Landmark Hotel with two friends who were admitted to a nearby hospital to undergo necessary treatment.

Global Consequences and Danger

Macau’s Social Affairs and Culture Secretary Ao Ieong Iu said to The Straits Times newspaper that Macau experienced a massive increase in tourists over the weekend due to Chinese New Year celebrations which surely puts in danger millions. Ao Ieong also said that visitors from Wuhan are not banned, but everyone should be cautious. So far, almost three thousand individuals are affected across China with several cases identified in the USA, Thailand, Australia, France and Austria which makes the virus a global threat.