Casinos in Cotai (Billy H.C. Kwok/Bloomberg)
Shares of Las Vegas Sands Corp., Wynn Resorts Ltd. and other global casino companies rallied today (Monday) after prospects brightened for Macau, the world’s largest gambling hub.
Macau’s neighboring Chinese province, Guangdong, agreed to lift quarantine requirements for travelers returning from the area, paving the way for a revival of its languishing casino industry.
Las Vegas Sands, the largest casino owner, jumped as much as 9.6%, while Wynn climbed as much as 11%. MGM Resorts International was up as much as 6.5%, and Melco Resorts & Entertainment’s U.S. shares jumped 14%.
The agreement, announced on Monday, will remove the 14-day quarantine requirement put in place by Guangdong in late March to stem the coronavirus pandemic. That measure effectively cut off Chinese travel to the gambling enclave, leaving baccarat and roulette tables virtually empty.
The restriction will be lifted on July 15 at 6 a.m. local time. Travelers will still need to get a virus test before they go.
The easing of restrictions should provide much-needed relief to Macau’s casino industry, which saw gaming revenue plunge by more than 90% for three straight months as the highly infectious pathogen forced countries to shut borders. The lifting of quarantine requirements will now allow high-roller Chinese gamblers, the enclave’s lifeblood, to return freely.
Macau’s gross domestic product, heavily reliant on the tourism and gaming industry, shrank 49% in the first quarter of this year. Even though casino operators reopened after an unprecedented 15-day shutdown in February, travel curbs meant tourists and high rollers couldn’t get there. Morgan Stanley estimated that the industry is losing $15 million daily in expenses.
Investors and analysts are hoping China will now take further steps to ease the resumption of visitor flow, including lifting its freeze on the individual and group tourist visas that middle-class Chinese use to travel to Macau.
The coronavirus outbreak has been largely contained in Macau, although neighboring Hong Kong has seen a resurgence of cases. Walt Disney Co. said on Monday that it was temporarily shutting down Hong Kong Disneyland on July 15.
Macau has detected only a handful of coronavirus cases since April.
MDT/Bloomberg
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