Shifting Frontlines: Macau Venues Remain Open as European and US Gambling Shares Tank due to Impacts of Covid19
While it seems Macau’s efforts to halt the local spread of the now global Covid19 coronavirus pandemic last month were relatively successful, casinos and gambling operators across the rest of the world are now the ones primarily feeling the pinch.
The Asian gambling hub reported no new cases of the respiratory disease for 40 days—until last Sunday, when a worker returning from South Korea was formally diagnosed with the virus.
During that time, the pneumonia-causing illness had infected a further 120,000 people across the globe, killing over 8,000 in total.
Although most of Macau’s venues have now reopened in a limited fashion, fears of the spread and regional lockdowns have caused physical casinos from the USA to Europe to shut their doors until further notice.
Many operators based in Europe, which was declared the new epicenter of the pandemic by the World Health Organization last week, have already reported falling share prices amid market panic in almost all sectors of the economy.
Flutter Entertainment (Paddy Power & Betfair), GVC Holdings, William Hill, and many more reported dips in share value this week.
With up to 78% of Flutter’s revenue coming from sports betting, the cancelation of swathes of major sporting events worldwide has not been taken lightly by investors. A company spokesperson said the cancellations would have a ‘material impact’ on revenue over the coming year.
The Euro 2020 football championships, the UK’s Grand National horse racing event, and national football leagues across Europe (including Spain’s La Liga, Italy’s Serie A, England’s Premier League, and the continental Champions League) have all bitten the bullet and postponed or canceled their seasons over the past few weeks.
However, one could reasonably expect that online casino and poker revenues could go up in the short term as people adapt to social distancing and home quarantine.
The outlook still seems bleak to investors as Flutter’s share price fell 12% during Monday’s trading alone. Others, such as The Stars Group, saw an even more precipitous fall, losing up to 17% of their value over the last week.
William Hill told investors that they could lose up to £100 million in revenue in 2020 based on lost sports bets alone.
Meanwhile, across the Atlantic in the USA, where states are increasingly taking measures into their own hands as President Trump has been widely criticized for the slow federal response to the pandemic, physical casinos across the country are closing their doors.
The local governments and gaming regulators of Colorado, Mississippi, Maine, Pennsylvania, Louisiana, Connecticut, and many more states have mandated or suggested that casinos close to help prevent the spread of the virus.
Although not required by local or national authorities, big players MGM International and Wynn Resorts both announced the closure of all their casino properties across the US starting Monday, March 16th.
Their properties include some of the most iconic venues in Las Vegas, the most famous casino city in the world, such as The Encore, The Bellagio, and the MGM Grand.
These super casinos will remain shuttered for at least two weeks. After that, their owners will reassess the risks.
However, with the US (and global) outlook not looking too promising for a vaccine any time in the next few months, most aren’t holding their breath for a quick reopening.
“It is now apparent that this is a public health crisis that requires major collective action if we are to slow its progression,” said MGM Chairman Jim Murren in a press statement.
“We plan to reopen our resorts as soon as it is safe to do so, and we will continue to support our employees, guests, and communities in any way that we can during this period,” he continued.
MGM’s casinos in Macau will remain open at this time, although visitor numbers are way down as the Chinese appetite for non-essential travel remains extremely low for the most part.
In the USA, many have reported that legal online casinos in states like Pennsylvania or New Jersey are seeing a spike in custom and revenues as people choose to avoid leaving their house and are practicing social distancing.
This could prove a saving grace for gambling operators in areas that allow legal online casino gaming. However, as for the overall effect, we are too early into this troubling global situation to determine anything concrete.
Keep checking these pages for updates on how the ongoing coronavirus pandemic will affect the gambling industry.