by Cody on July 13, 2020

Casino shares jump after China lifts quarantine rules in Macau

After China lifted quarantine regulations due to the ongoing pandemic, Macau, the world’s biggest gambling hub is finally seeing the light at the end of the tunnel. And with that came the rallying of the shares of Las Vegas Sands Corp., Wynn Resorts Ltd., and other global casino companies. And anything change in the lockdown regime occurred in Macau’s neighboring Chinese province, Guangdong. The province agreed to lift quarantine requirements for travelers returning from the area, paving the way for a revival of its flourishing casino industry which is something every land-based casino is looking forward to with big expectations.

Investors and analysts are now hoping that China will take further steps to ease the resumption of visitor flow which includes lifting its freeze on the individual and group tourist visas that middle-class Chinese use to travel to Macau.

The difference in the lifting of the rules made was even bigger than expected. For example, 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%. And the list goes on and on for all different casinos that are slowing coming back to life after a break of around 4 months.

The quarantine requirement that has been activated by Guangdong in late March will be removed according to the agreement. Thi regime, of course, cut off Chinese travel to the gambling necklace, which left basically all casino game tables empty and the halls deserted. The said 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 though, but that is definitely something that not only will every gambling fan put up with, but at this point is already a routine part of everyone’s daily life.

The easing of restrictions should provide much-needed relief to Macau’s casino industry. During three straight months, Macau’s gambling industry saw nothing but a gaming revenue plunge by more than 90% as the highly infectious pathogen forced countries to shut borders. The lifting of quarantine requirements will now allow high-roller Chinese gamblers to return freely.

Macau’s gross domestic product, heavily reliant on the tourism and gaming industry, shrank 49% in the first quarter of 2020, as did most GDP around the world. 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.

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. But at the same time, Macau has detected only a handful of coronavirus cases since April and seems to be handling the situation well.

By Cody

More content by Cody

Comments (0 comment(s))