Fears over the Coronavirus have devastated tourism for China’s Macau casinos. According to a report on CNBC attendance is down close to 70 percent due to the recent outbreak. The virus was first detected in Wuhan, China. Widespread concerns over the outbreak cut directly into tourism generated by the Lunar New Year holiday season .
Why Does The Coronavirus Make a Strong Case For Online Gambling In Macau, China?
The ripple effect could continue in light of a possible pandemic of the virus. Quarantines, travel warnings and actual travel restrictions are not helping the situation. Gaming industry experts are also concerned with the long-term impact on business.
The situation should act as a “wake-up call” for the Chinese government and all casino interests in the region. The general industry sentiment is that legalized online gambling could remedy these type of issues.
Jason Ader is a managing partner for SpringOwl Asset Management. His gaming industry experience stems from being on the board at Las Vegas Sands. Ader was also a top-ranked gaming analyst for Bear Sterns for over 10 years.
He relayed an observation that the situation that has pushed gamblers to illegal online gambling sites. There has also been a boost in business for legal Philippine online casinos. Ader voiced the following opinion on CNBC’s “Squawk Box” early last week:
“Daily gambling is up 90% over the Lunar New Year Holiday compared to last year. That’s an unbelievable number. And it raises the issue of should land-based operators be converging around the world with online operators. That’s really a growing trend.”
Online gambling in Asia remains largely unregulated. While legal in the Philippines, it is illegal in China. Ader’s comments on Asia in general as they pertain to online gambling were:
“Asia is still very much the Wild West, it’s very unregulated. But the land-based operators are not getting any business. The online operators and Philippines licensees are picking up most of these players. I think it’s a wake-up call, not just in Asia but in the US. The European companies are in a leading position.”
The Macau casinos remain open at this time. Employees interacting with customers are wearing protective masks. There is a detailed cleaning and hygiene regimen in place. Moreover, this covers the casino floor and the back portion of the properties. The chief executive of Macau does have the authority to close the casinos if the outbreak intensifies.
By the middle of last week, confirmed cases in China crossed the 6,000 mark. Furthermore, this has already exceeded the total number of SARS cases in the 2002-2003 epidemic
The Coronavirus is already responsible for 132 confirmed deaths.
The impact on gaming company stocks has also been felt. Las Vegas Sands, Wynn Resorts and MGM Resorts have all experienced a double-digit decline. The first two Las Vegas entertainment and gaming companies account for 65% to 75% of revenue in Macau. For MGM Resorts, that figure drops to 25%.
The threat of the virus extends to Singapore with Las Vegas Sands’ biggest casino located in that country. The situation for other Asia-based casinos remains fluid at this time.
• Source: Coronavirus is a ‘wake-up call’ for China, Macau casinos to embrace online gambling From CNBC.com On January 29, 2020.