WYNMY Wynn Macau Limited (PK)

By Jing Yang and Frances Yoon 

The world's richest gambling market has closed its casinos to help curb the spread of the deadly coronavirus that has killed hundreds in China.

Macau said it would close casinos for 15 days starting Wednesday, Chief Executive Ho Iat-seng said Tuesday. The semiautonomous Chinese city is home to properties run by Wynn Resorts Ltd. and Sheldon Adelson's Las Vegas Sands Corp., among others.

Gambling and entertainment is the lifeblood of the former Portuguese colony and Macau's gaming tables are rarely without players. The city closed its casinos for 33 hours due to a powerful typhoon in September 2018.

"It's a very difficult decision, but one we have to make for the sake of the health of Macau citizens," Mr. Ho said at a news conference. The recently appointed chief executive said he would meet with casino operators later Tuesday to discuss details.

A total of 41 gambling and entertainment venues would be shut, including casinos, bars, theaters and clubs, Secretary for Economy and Finance Lei Wai Nong said at a second news conference.

The government will also pare back public services to meet only essential and emergency needs; it urged citizens to stay inside unless absolutely necessary.

Macau has recorded 10 cases of people infected with the viral pneumonia. The two most recent cases were people who work for casino groups. As of midnight Monday, mainland China had 20,438 cases, with 425 deaths, according to the National Health Commission.

Shares in the casino giants' Hong Kong-listed units have fallen sharply since mid-January and some of the declines came after Mr. Ho first said a shutdown may become necessary.

On Tuesday, they dropped further, taking the year-to-date declines for MGM China Holdings Ltd. and Wynn Macau Ltd. to 16% and 14% respectively, according to data from Refinitiv. Sands China Ltd., which is part-owned by Las Vegas Sands, has fallen 11%.

Sands China's Venetian Macao closed its casino immediately after Mr. Ho's announcement, a receptionist at the hotel said. The person said the resort will comply with official guidelines and didn't give a specific date for reopening the casino.

A person handling reservations at the Venetian said the hotel would remain open but some restaurants would close entirely for the next two weeks, and the hotel's shops would close earlier than usual. A Wynn Macau reservations employee said it would close the casino and poker room and suspend the hotel buffet.

Sands China and MGM didn't reply to emails requesting comment.

Macau is the industry's heavyweight city, generating more than five times the revenue that Las Vegas did in 2018. But revenue fell in each of the last three months of 2019 compared with the year-earlier period, according to Macau's Gaming Inspection and Coordination Bureau.

In January Macau's gross gaming revenues dropped 11.3% year-over-year to 22.1 billion patacas ($2.76 billion), a decline fueled partly by a collapse in visitors during the Lunar New Year holiday, which this year began on Jan. 25.

The number of mainland Chinese tourists plunged more than 80% during the weeklong holiday, while Macau's overall visitor tally dropped 78%.

Gross gaming revenue could decline 65% year-over-year in February if Macau's casinos close for two weeks, Jefferies analysts Andrew Lee and Lois Zhou wrote in a note on Tuesday.

Still, the casino operators can weather the suspension provided that it is temporary, said Angela Han Lee, an analyst at China Renaissance Securities (Hong Kong) Ltd. Ms. Han Lee said most of their costs were variable and so wouldn't be incurred during a suspension, meaning they could report positive earnings before interest, tax, depreciation and amortization even if gaming revenue drops 60%.

Paul Tse, chairman of the American Chamber of Commerce in Macau, said the casino closures would encourage gaming companies "to not get their employees coming to work from Zhuhai." Many staff live in nearby Zhuhai, across the border in mainland China.

"The government's intention is quite clear: reduce the number of people transiting from the various border checkpoints," Mr. Tse said.

Joyu Wang contributed to this article.

Write to Jing Yang at Jing.Yang@wsj.com and Frances Yoon at frances.yoon@wsj.com

(END) Dow Jones Newswires

February 04, 2020 06:55 ET (11:55 GMT)

Wynn Macau (PK) (USOTC:WYNMY)
Historical Stock Chart
From Oct 2024 to Nov 2024

Wynn Macau (PK) (USOTC:WYNMY)
Historical Stock Chart
From Nov 2023 to Nov 2024