COVID-19’s (Coronavirus) Impact on the Casino Industry
When the novel coronavirus (COVID-19)
hit China in full in November 2019 no one batted an eyelash. With an unknown
underlying cause, the pneumonia that slowly but steadily started claiming human
lives was chalked up to a localized phenomenon, although the World Health
Organization (WHO) was on red alert as soon as it heard that a mutated form of
the coronavirus might be spreading.
By February it had become clear that
the coronavirus is a threat that must be contained and China answered raised to
the occasion quarantining 11 million people in Wuhan. Everything suffered, but
the virus has been finally brought under control at least in China.
Sacrifices had to be made by everyone
and understandably, the coronavirus affected Macau and the casino industry
there. Early in February, Macau – one of the world’s largest gambling hubs – had to bring its casino industry to a halt as it complied with a two week quarantine
period in place.
Macau Casinos Continue to Bear the Brunt of the Coronavirus Outbreak
Casinos in Macau kept losing an estimated
$2.5 million per establishment per day in Macau throughout February with the
total gambling revenue in the month falling by 88%. In comparison, the revenue
suffered only 11.3 in January. But while China may have pronounced the
coronavirus defeated, a set of strict new measures has been introduced by the
In public, citizens keep their
distance. They are subjected to random and regular screenings by health
inspectors and police circulating in public. Yet, Macau’s re-started hub is not
quite picking up steam yet as foreign travellers are not too eager to return to
Macau, although Asia may now be safer when it comes to the coronavirus than
Europe and the United States where the death toll has been rising.
Yet, Macau is yet to try and rally
after a difficult month that saw almost 90% of its
revenue written off due to the
lockdown and uneasiness that followed. Macau casinos cannot for sure how bad
this year is going to turn out, although analysts already predict a
back-to-back bad year for the industry.
The real question remains by how much.
Some have said that the revenue is most likely going to pick up responding to
pent-up demand – a theory that has yet to be tested.
Macau Rallies, But the United States Suffers
While Macau seems to have normalized,
the United States is only now beginning to experience the potential problem of
a new deadly strain of virus that has high transmittance rate and a mortality
rate that has reached 3% of all infected.
With Germany and the United Kingdom predicting that 80% of the population may become infected, a 3% mortality rate
suddenly seems too much. The Wildhorse Resort & Casino in Oregon became the
first casino establishment to shut down amid fears of spreading the infection
after a worker tested positive for the disease.
So far, 32 people have died out of
1,000 cases which aligns with the forecast 3% mortality rate. Presently, Las
Vegas and Atlantic City are on edge but no establishment there seems to have
closed operations for the time being.
With 1,000 cases reached, however,
casino establishments such as ARIA, Bellagio, MGM Grand, Mandalay Bay, The
Mirage, Luxor and Excalibur will
temporarily close their buffets from March 15 onward until a resolution to the
situation is found.
Yet, Nevada health authorities aren’t
yet certain if the disease hasn’t already spread across the city and health
workers are worried that they may have already been exposed in ERs.
Surprisingly, though Las Vegas Mayor Carolyn Goodman has insisted on buffet
staying open, perhaps focusing too much on the potential economic risks.
No Closures, But Casino Begin to Feel the Effects of the Coronavirus
While the US casino industry is going
at full bore, companies are already feeling the pressure from the coronavirus
threat. No-one is safe and casino patrons seem to be coming to the same
realization, avoiding establishments.
Of course, the panic of the virus is
also not necessarily justified when you think about it, but it still comes in
the way of casinos’ bottom line. Meanwhile, the New York’s Yonkers Raceway has
become the second establishment to shut down after a worker contracted COVID-19
Several companies have taken the
financial consequences of the coronavirus outbreak very seriously as well,
citing the virus on their earnings call. The brands to have discussed the virus
seriously as part of their business strategy include Las Vegas Sands, Melco,
MGM Resorts and quite a few others who have been closely following any
developments related to the coronavirus.
Italy’s Casinos on Lockdown
Meanwhile, Italy has become the
world’s most severely affected country with the death toll soaring to 36% with 631 people
dying with estimated 10,000 infected.
Responding to the rapid increase in death cases, Italy’s prime minister,
Giuseppe Conte, has called for a nationwide quarantine lockdown with all
services cut down to a bare minimum.
The measures included establishments such
as casinos that may remain open only within certain hours and only on the
condition that there is at least one-meter space between patrons and staff.
However, with the severity of the
outbreak intensifying, the government may undertake even stricter measures and
bring the entire country to a complete shutdown. Economic blues have crept into
the daily lives of Italians, but the Conte’s government has announced a
moratorium on debt and mortgage to put the economy to a standstill and prevent
people from becoming financially ruined as a result of the disease.
Entertainment and Casinos Will Continue to Suffer
Overall, the economic outlook for the
casino industry is morose to say at best. It is not very likely that the casino
industry will manage to rally in 2020. Even with Macau coming back to normal,
visitors are more than reluctant to travel and be in places where a lot of
people come from every corner of the world. The WHO expects the coronavirus to
continue buffet the world until June 2020 in the very least.