From India to Australia, casinos across the Asia Pacific region have closed their doors in response to efforts to combat the spread of the coronavirus, with little to no visibility at present as to the evolution of the situation.
The fast-changing nature of the crisis has left analysts scrambling to find a basis to rewrite their forecasts for the coming quarters, as operators struggle to cut high overheads in the face of collapsing revenue.
In Macau, the casinos remain open, but the borders to the outside world are closed with the territory seeking to prevent reinfection from a series of imported cases. The government has forecast a drop in gross gambling revenue of about 55 percent this year, compared with 2019, although equity analysts are slightly less pessimistic, with Jefferies putting the likely decline at around 45 percent for 2020, before a strong rebound of almost 33 percent next year.
The recovery in Macau is highly dependent on when China relaxes its individual visit scheme and tour group visas, which account for about 46 percent and 23 percent of visitation respectively.
Jefferies notes that a likely scenario is for China to begin easing on a region by region basis, depending on how many Covid-19-free days are reported. However, it notes that of the top 10 regions for Macau, six have reported new infections, while the gambling hub itself has also reported more than two dozen imported cases, which may delay the lifting of travel restrictions.
“Although we have cut both VIP and mass GGR estimates, we expect VIP to fare better than Mass this year as we estimate mass visitors are reliant on IVS and group tours,” Jefferies analyst Andrew Lee wrote in a note. “For example, based on discussions with industry contacts, the key main visitors since casinos reopened are VIP.”
In the Philippines, all casinos have been closed countrywide as of March 18, while workers for Philippine Offshore Gambling Operators have also been told to remain in their homes.
Philippine Amusement and Gambling Corp. Chair Andrea Domingo has said that GGR in Asia’s best-performing market for the past few years had fallen by as much as 40 percent in February prior to the shutdown, with the VIP sector faring worse due to its reliance on international travel.
President Rodrigo Duterte declared an indefinite state of emergency to tackle the outbreak on March 9, as cases began to rise. As of March 26, there had been 707 cases and 45 deaths.
Casinos in New Zealand, Australia, Malaysia, Nepal, Korea, Saipan and India have also announced they have been forced to close their doors.
In Australia, Star Entertainment has already detailed plans to furlough about 90 percent of its 9000 staff due to the closure. The company, which said it has available liquidity of about $480 million, will pay two weeks of pandemic pay and allow staff to draw on unused annual leave.
Directors will take a “significant” pay reduction.
“This is a unique environment and one beyond our control in which we’re determined to balance the necessary measures to protect the business, while considering the considerable human impact on our workforce,” Chairman John O’Neill said.
Crown Resorts has yet to detail its plans.
Properties are still open for now in Cambodia, Vietnam, Singapore and Russia, albeit with restrictions to help prevent the spread of disease.
In Cambodia, the situation is mixed. The country’s biggest resort, NagaWorld, in Phnom Penh is open and casinos in Sihanoukville are also operating. Although many outfits in the seaside resort had already been closing shop after the government banned online gambling last year, rendering them unviable.
“We are continuing to open with of course all precautionary measures possible,” Queenco Casino Director Dominic Stenson said. These include temperature checks and hand sanitiser on entry and face masks should they be requested. He added that visitation had improved last week, though reports of a positive test from a French tourist in the town had restoked concern.
The Star Vegas Hotel and Casino in Poipet, which relies on Thai tourism, has been shuttered due to the 14-day closure of the Thai border.
Its owner -- Australia-listed Donaco International -- said for the first 22 days of March 2020, total casino visitation was 53,463 players, averaging approximately 2,430 players per day. This is a decline of 15 percent from 63,039 players for the first 22 days of February 2020.
Rolling chip turnover in the first 22 days of March increased by 9 percent, compared to the first 22 days of February 2020. The increase was from THB1,418 million to THB1,552 million.
In response to the slowdown in the business, Star Vegas management has arranged unpaid leave for many staff members in March and April, as well as reducing total headcount, and deferring various capital expenditure projects.
The company’s Aristo Hotel in northern Vietnam is open, though has seen decreased numbers and is cutting costs, including head count to offset the impact.
"We have also unfortunately had to make some headcount reductions, which we very much regret the need to make, however this is a necessary decision for the current environment,” Donaco Chairman Mel Ashton said.
Singapore’s two casinos are open, but have significantly tightened entry restrictions. From midnight Thursday, access to the RWS casino will be limited to existing Genting Rewards card members and annual levy holders, while only MBS's Sands Rewards Club members holding Gold status or higher, and/or existing annual levy holders will be allowed in. Both are ensuring there is no more than one person per 16 sqm of usable space.
Maybank Investment Bank estimates visitation in the month of February at the two IRs was down between 50 and 70 percent.
The island state has been among the most successful at controlling the outbreak, though numbers have been rising from imported cases. It has about 631 people testing positive with the disease.
Summit Ascent’s Tigre de Cristal in the Primorye gambling zone is open. At present it is practising social distancing and increased hygiene, but has no lockdown.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264