Coronavirus fears shuts Macao, the world’s gambling capital

HONG KONG >> It’s like closing the Las Vegas Strip, six times over.

Officials in the Chinese city of Macao on Tuesday asked its 41 casinos to close for half a month as they rush to stop the coronavirus outbreak afflicting China and the region. The move will shut down the world’s gambling capital, which could hit big American casino operators like Wynn Resorts and Las Vegas Sands as well as the local companies that sustain the territory’s economy.

Authorities said 10 people in Macao have been sickened by the pneumonialike illness, among them a hotel employee at Galaxy Casino, one of the city’s busiest gambling establishments. Though no deaths have been reported there, the coronavirus is known to have killed more than 420 people in mainland China, one in the Philippines and one in Hong Kong, Macao’s neighbor.

“Of course this was a difficult decision, but we must do it for the health of Macao’s residents,” said Ho Iat Seng, chief executive of the semiautonomous Chinese territory, in a televised news conference.

Wearing a blue face mask and a suit, Ho said the case of the hotel worker served as a warning that the virus was beginning to spread through the city. The worker had shared shuttle buses and the casino cafeteria with colleagues.

Gambling accounts for four-fifths of the Macao government’s revenue. But Ho said, “Macao can still bear these economic losses.”

The coronavirus has shaken companies and investors around the world who have come to rely on China for its efficient factories, its increasingly affluent consumers and its years of hard-charging economic growth. General Motors, Ford, Nissan and other auto companies have temporarily closed factories. Apple and Starbucks have closed stores.

On Tuesday, Cathay Pacific, Hong Kong’s biggest local airline, announced steep cuts to China flights and plans to pare back across its network. American Airlines suspended all flights to Hong Kong from Dallas-Fort Worth and Los Angeles through Feb. 20, citing low demand.

Most of China remains shut down by the coronavirus, which first emerged in the Chinese city of Wuhan and has sickened thousands of people in the country. The global economic outlook, the fortunes of major companies and the jobs of workers around the world could depend on how quickly they come back.

Macao makes a glittery and sometimes gaudy symbol of the world’s dependence on Chinese money. A former Portuguese colony that was returned to Chinese control in 1999, Macao is the only part of China that allows casino gambling.

As deep-pocketed Chinese tourists arrived in droves, Macao transformed into a thriving international and hub for entertainment, fine dining and luxury shopping. Gambling companies have built vast casinos, illuminating the skyline of this once-sleepy city of just over 622,000 people with neon and spotlights. It offers everything that Las Vegas has — like a miniature Eiffel Tower — and more, like a gilded-dragon cable car that floats past dancing water fountains at the Wynn Palace.

Macao was bustling just two weeks ago as tourists from the mainland arrived to spend the Lunar New Year holiday at the city’s baccarat tables and Michelin-starred restaurants. “There were no signs of the epidemic anywhere,” said Wang Qian, who traveled with her parents to shop and see the sights.

When they visited the Casino Lisboa on Jan. 21, employees took their temperatures. Still, when they left three days later, “I don’t think people took it seriously yet, but many started to wear face masks,” she said.

Macao also suspended basic public services Tuesday, and Ho urged residents not to leave their homes except to get food. “This is not a holiday,” he said.

“It’s just mind-boggling. I’ve never seen anything like this in my 25 years here,” said Carlos Lobo, a lawyer and gambling consultant in Macao.

“This shows two things: the seriousness of the situation and the extreme measure that the government is taking to control the outbreak,” Lobo said.

Macao’s gross gambling revenue totaled $36.5 billion last year, a 3.4% drop from the year before but still about six times that of the Las Vegas Strip. In more recent years, the biggest American casino operators like Wynn Resorts and Las Vegas Sands Corp. have come to rely on their towering outposts in Macao.

The impact will be “devastating” in the short term, said Matthew Ossolinski, a gambling consultant and investor. He estimated that the two-week closure could shave between 5% and 15% off Macao’s gambling revenue this year.

Sands, founded by American billionaire and major Republican donor Sheldon Adelson, owns several casinos and hotels in Macao including the Venetian Macao, the Parisian Macao and Sands Macao. Wynn Resorts, until recently run by casino mogul Steve Wynn, owns three properties in Macao.

Sands did not respond to a request for comment. A spokesman for Wynn Resorts, Michael Weaver, said the company supported the government’s decision to close casinos in Macau.

“Our greatest concern and our top priority is the health and safety of our employees, their families and the citizens of Macau,” Weaver said. “We believe that our goals and the goals of the Macau government during this challenging period are fully aligned.”

Ossolinski, the gambling consultant, also said he expected the industry to bounce back once casinos opened again and Chinese tourists were allowed to travel to the city. “Macao remains the golden goose,” he said. But when things would pick up would be “harder to predict.”

In late January, Chinese authorities began to take drastic measures to contain the outbreak. The shift coincided with Lunar New Year, the most lucrative time for Macao casinos, and the city has already seen visits drop by 80%, according to Fitch Ratings.

For weeks many casino floors, typically brimming with Chinese tourists, have been largely empty. Recent visitors described empty casino floors, worse than when China clamped down on the casinos to stop corruption by government officials.

Lobo, the consultant, who has lived in Macao for 25 years and has worked for the Macao government and the Venetian, visited some of the biggest casinos in Macao on Monday.

“I was like, ‘Whoa, this is big,’ ” he said. “It’s like a ghost town in terms of patrons. It was surreal.”