Can Las Vegas learn from Macau’s closure?

Shut down more swiftly, the region’s casinos have been reopened for nearly a month

Buses drive across a bridge from Macau on Feb. 5, the day after casinos were ordered to close. (Photo by Anthony Kwan/Getty Images)

Nevada officials had a blueprint in Macau for stemming the spread of coronavirus.  

The faraway place with close ties to Las Vegas took swift action after only a half-dozen cases of COVID-19 surfaced in February, forcing 41 casinos, including those owned by Las Vegas Sands, Wynn Resorts, and MGM Resorts International, to close in the densely populated gaming mecca for 15 days.

MGM Resorts reported losing $1.5 million a day while closed. Wynn Resorts said it was losing $2.5 million each day. They reopened Feb. 20, and as of last week about half the tables in Macau’s casinos were open for bets.

Until this week, Macau had 10 cases of COVID-19, the same number of recovered patients and no new cases in a month. Five more cases have been identified this week in international travelers and one casino worker returning from the Philipines, and the country is implementing new quarantine measures for anyone arriving from high-risk areas, according to the Macau News

“We do credit the closure in Macau with limiting the spread of the virus,” Wynn Resorts spokesman Michael Weaver said. “The evidence and testimony from American health and safety experts is clear: social distancing is necessary to slow the spread of the virus, (and) limit over-burdening the Las Vegas health system and ensure public safety.”

By the time Gov. Steve Sisolak ordered casinos — along with restaurants, bars, malls, salons and gyms — shut down Tuesday, Nevada had 55 confirmed cases of COVID-19, 42 of them in Southern Nevada. Wynn Resorts, MGM Resorts International and Las Vegas Sands announced in days prior to the governor’s announcement that they would be closing properties. But dozens of other properties remained open until Sisolak ordered their closures. 

What can casino companies expect when they emerge on the other side of a minimum 30-day mandated closure, twice as long as that in Macau?

Much will depend on an individual company’s exposure in Las Vegas, Nomura Instinet analyst Harry Curtis wrote to investors Wednesday, according to Barron’s.

“It is no revelation that Macau is the most likely casino market to rebound in the near term, possibly putting the stocks in the best position to recover earliest,” he said of companies concentrated in Macau.

“This is obviously historic for Nevada. The one great truth has been that no matter what’s going on in the outside world, the dice keep rolling in Nevada casinos,” says UNLV gaming expert, writer and historian David G. Schwartz. “While Macau provides an operational example of how casinos can shut their doors and reopen, it is difficult to see if the lessons learned there will be applicable in Nevada, since they are very different jurisdictions.” 

Gross gaming revenue in February of $386.5 million was down 88 percent from the previous year, according to Macau’s Gaming Inspection & Coordination Bureau. 

While Macau casinos are struggling to regain customers, JPMorgan analysts are hopeful in the long run.

“We do not think COVID-19 will curb gamblers’ enthusiasm in a sustainable way, so its impact on the industry’s sustainable earnings power should be limited,” analysts told Bloomberg of the outlook for Macau casinos.

“JPMorgan is forecasting a 24% decrease in gross gaming revenue for the year, based on the expectation of a 70% slump in March and 35% decline in the second quarter, before narrowing the decline to 8% in the following three months, followed by a 5% bump in the final quarter. Pretax earnings will likely fall 30%,” Bloomberg reported.

Analyst Jeremy Aguero says he’s working on modeling the likely scenario on the other side of the Nevada casino closures. No data is available at this time.

“This is going to be by far the biggest test the gaming industry has faced in Nevada. Past threats were political and economic, but shutting down entirely for at least a month is a scenario that I don’t know has even been contemplated,” said Schwartz. “I do have faith that the people of Nevada will pull through — they have proven time and time again their resiliency.”

Dana Gentry
Reporter | Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas. Gentry began her career in broadcasting as an intern at Channel 8, KLAS-TV. She later became a reporter at Channel 8, working with Las Vegas TV news legends Bob Stoldal and the late Ned Day. Gentry left her reporting job in 1985 to focus on motherhood. She returned to TV news in 2001 to launch "Face to Face with Jon Ralston" and the weekly business programs In Business Las Vegas and Vegas Inc, which she co-anchored with Jeff Gillan. Dana has four adult children, a grandson, three dogs, three cats and a cockatoo named Casper.