Macau Resists Closing Casinos Second Time, Will Press Beijing to Lift IVS Freeze

Posted on: April 3, 2020, 09:29h. 

Last updated on: April 3, 2020, 10:13h.

With the coronavirus outbreak forcing an array of travel restrictions, visits to Macau are falling to rock- bottom levels. But officials in the Special Administrative Region (SAR) aren’t mulling a second round of casino closures.

Macau won’t shutter casinos a second time. But it’s pressing Beijing to lift visa restrictions. (Image: Reuters)

Rather, lawmakers there are planning to press Beijing to lift the freeze on the individual visit scheme (IVS) once it’s clear the COVID-19 pandemic is subsiding. The IVS is the primary source of visas gamblers from mainland China use to enter Macau. Limits on IVS issuance were implemented last November in advance of President Xi Jinping’s December visit to the SAR, but it was widely expected those restrictions would be lifted early this year. Then, along came the coronavirus outbreak.

The government does not have a plan to adjust the current operations on casinos,” said Secretary for Economy and Finance Lei Wai Nong at a Thursday press briefing. “Macau and the mainland is working hard on preventative measures. Once the situation of the epidemic is eased, the SAR government will ask the central government to resume the IVS.”

In February, authorities mandated the peninsula’s casinos close for 15 days to prevent the spread of the coronavirus. The plan was effective – Macau went 39 days without a new case of the respiratory illness – but it also led to a nearly 88 percent drop in February gross gaming revenue (GGR). March numbers were barely better, showing a decline of almost 80 percent.

Worse Before it Gets Better

Currently, Macau is only admitting Chinese, Hong Kong, and Taiwanese nationals. But the combination of the SAR’s and those regions’ various travel controls is grinding visits to the gaming center to paltry levels. For example, last Sunday saw just 230 travelers arrive to the peninsula.

Further stymieing Macau’s rebound efforts is the Guangdong province’s recently announced 14-day quarantine for any traveler from outside mainland China passing through the region. Guangdong is the province nearest to the gaming hub, making it a pivotal artery for would-be gamblers.

Some analysts are projecting April GGR on the peninsula could be as bad as, if not worse, than the February and March figures. One research firm is forecasting an 87 percent to 92 percent decline, assuming Guangdong doesn’t lift the quarantine protocol and Beijing continues the IVS restrictions.

Keeping Jobs Secure

While some US gaming companies are laying off staff in massive numbers, Macau operators are retaining staff even though visits to casinos are scant.

“Keeping casinos open is because the gaming industry is not only providing (gambling) services, but also guarantees the employment of over 58,000 employees,” said Lei.

Ahead of the 2022 license renewal process, Macau concessionaires appear committed to avoiding headcount reductions attributable to the COVID-19 pandemic. But that decision is expensive. Operators there are burning between $1.5 million and $4 million per day just to keep venues open, prompting speculation regarding how long some can survive in a near zero-revenue environment.