The novel coronavirus (nCoV) that has been spreading across the globe from Wuhan, China is taking a toll on the land-based casino industry in Asia, particularly in Macau.
Before the nCoV outbreak, the casino operators in the richest gambling market in the world were expecting players, mostly Chinese, to flock the casinos in time for the peak of the Lunar New Year holidays. Such expectation reversed as quarantines and travel bans began to be imposed not just by China but also by other nations affected by the virus.
On February 4th, 2020, the casinos in Macau were ordered by the city to close for 15 days as part of the government’s effort to curb the spread of the nCoV.
As of today, there are now over 40,500 confirmed cases of nCoV (more than 40,100 of which are all within mainland China), according to the data provided by Johns Hopkins CSSE. Reportedly, there have already been 910 deaths, over 800 of which are also within China.
Jason Ader, Managing Partner at SpringOwl Asset Management, said in an interview with CNBC that the coronavirus situation has made a lot of gamblers resort to illegal web-based gambling. He added:
“Once it [nCoV] starts spreading, other casinos can get hit. I think it’s a wake-up call, not just in Asia but in the U.S. The European companies are in leading positions.”
A decline in the shares of big gaming companies like Las Vegas Sands and MGM Resorts has been observed. These companies just suffered from a two-digit percentage decrease.
If the nCoV outbreak intensifies, Macau’s chief executive may order an extension of the temporary closure of the casinos in the region. Ader said:
“The mentality in the casino industry is 24/7 you stay open, the goal of operators is to stay open.”
This is why he deems it necessary for Asian governments to push for the legalization of online gambling and the implementation of stricter taxation for and regulation of licensees in the future. This way, revenues in casinos will flow the way it does in Europe’s gambling industry, and operation will continue as offshore gambling becomes the better option more so if disease outbreaks arise.
Threats to casino revenue also hit other countries in Asia, including Singapore where the biggest casino of Las Vegas Sands is located. Singapore now has 43 confirmed coronavirus infections.