Very strict quarantine and travel restrictions have seen the COVID-19 pandemic under control in the Chinese gambling enclave of Macau.
In recent months, with coronavirus numbers down, casinos have been trying to get back to business-as-usual, although it is clear that it will take a number of years before they reach pre-pandemic numbers.
Unfortunately, with a new outbreak recently reported, health authorities in the region are mulling the return of stricter restrictions. Many believe that it’s only a matter of time before casinos will be shut once more. Even if not, the tough travel restrictions mean that there are almost no visitors to the region.
Analysts are predicting that gross gaming revenues (GGR) could reach zero within a few short weeks, a fact which will obviously negatively impact operators.
One of the greatest concerns for operators is their liquidity status. For a casino to make it through the retendering process Macau, officials require that they have $625 million in net assets set aside within its concessionaries.
Some operators such as Wynn and MGM have around two years in liquidity, however operators such as Sands and SJM have liquidity that won’t last longer than March next year.
The market is watching Macau closely as the situation could impact share prices in some of the biggest brands in the business.
