Las Vegas Sands President Goldstein Says Macau Closures Could Extend Beyond Two Weeks
Posted on: February 5, 2020, 04:35h.
Last updated on: February 5, 2020, 06:18h.
Macau’s casino closure effort, aimed at protecting the Special Administrative Region’s (SAR) citizens and gaming staffers from the coronavirus, could last beyond the expected two weeks, according to one industry executive.
Las Vegas Sands (LVS) President and COO Rob Goldstein made comments to that effect at the Nevada Gaming Control Board (NGCB) meeting held in Sin City earlier today. He was appearing before the board for a standard licensing suitability hearing, but provided some insight on the new coronavirus situation in Macau.
It could be two weeks, it could be two months,” Goldstein regarding the casino closures.
On Tuesday, Macau Chief Executive Ho Iat Seng said the peninsula’s 41 gaming properties will be shuttered for two weeks after reports of the tenth coronavirus case there. The number of documented cases of the respiratory illness remains at 10 in Macau, but is approaching 25,000 globally with nearly 500 deaths – all but two of which occurred in China.
Dubbed the “Wuhan virus” because of its origins in the central Chinese city of the same name, the new coronavirus is a previously undiscovered strain similar to severe acute respiratory syndrome (SARS), Middle East respiratory syndrome (MERS) or the common cold.
As the number of confirmed cases in the world’s largest gaming center increased, so have China’s responses to keeping travelers out of the SAR. Last week, Beijing temporarily froze issuance of the Individual Visit Scheme (IVS), a prime source of visas for gamblers looking to visit Macau from the mainland.
That was after Hong Kong and Taiwan, among other regions, restricted its citizens from leaving to visit the gaming center. Earlier today, Taiwan announced it is restricting entries by travelers whose trips originated in Hong Kong and Macau.
On the LVS fourth-quarter earnings conference call last week, prior to the announcement of the closures, Goldstein said that due to an 80 percent drop in visits to Macau in January, it would be next to impossible for the company to make up that lost revenue simply by lowering costs.
“It’s a scary time for all of us,” said the Sands president.
The company owns five Macau gaming properties and generated $2.24 billion of its $3.51 billion in fourth-quarter revenue there.
Worse Before it Gets Better
With the coronavirus now keeping would-be Macau visitors at bay, gross gaming revenue (GGR) outlooks for the peninsula are becoming increasingly dour. In January, gaming receipts tumbled 11.3 percent. But that could end up looking good relative to the 75 percent drop some analysts are expecting this month.
JPMorgan analysts are forecasting a 75 percent slide in the SAR’s February gaming revenue and a six percent annual decline, a call released just days after the same researchers said turnover on the peninsula would retreat 60 percent this month.
Operators and executives have yet to make to offer up first-quarter profit and revenue estimates as the virus has worsened. But they may not need to because, as one research firm put it, Macau numbers for the first three month of this year are bound to be “awful.”