Gambling grinds to a halt in Macau as Typhoon Mangkhut wreaks havoc

Typhoon Mangkhut has devastated the Philippines and China, including Macau, perhaps the world’s largest gambling hub. Gambling activities have come to a halt in the region, where people are thinking about only one thing: saving their own life.

The employees in gambling industry said the closure of gambling happened for the first time since gambling started in the region in 2002. The suspension of gambling came into effect at 11 pm. Gambling will resume only after the typhoon has passed.

The shutdown is the latest blow to Macau casino operators after a rebound for the industry that began more than two years ago. Investor worries are growing over a pullback in spending by big gamblers as China faces an economic slowdown and uncertainties tied to the trade war with the US.

 “This robs the month of one important weekend day,” which typically generate significantly higher gaming revenue than midweek days, said Grant Govertsen, analyst at Union Gaming Securities Asia Ltd. He said delays in restoring transportation to Macau will further affect revenue on Monday.

Govertsen said September’s revenue growth rate could be impacted by as much as seven percentage points, almost cutting in half the firm’s previous forecast of a 15 per cent increase.

Ben Lee, a Macau-based managing partner at Asian gaming consultancy IGamiX, also expects to lower his outlook for the industry. He had previously projected year-over-year growth of about 10 per cent for September. Lee said the decision to shut the casinos was the right choice to ensure employees’ safety, and noted that the industry is “still in positive growth territory.”

Junket operators and other industry officials expressed relief at the shutdown, praising the government’s decision.

“This is the first time in Macau history that all casinos halted operations, to ensure the safety of employees,” said Stephen Lau, president of Power Macao Gaming Association, an organization that represents casino workers. “We are seeing the government and casino operators no longer just put profit over the employees’ interest.”

The Bloomberg Intelligence index for Macau casinos is down 34 per cent since the end of May, with MGM China Holdings Ltd. tumbling 45 per cent while Wynn Macau and Melco Resorts & Entertainment Ltd. are both down 36 per cent.

Casinos in Macau have had 25 straight months of growth, boosted by high rollers and the opening of flashy new resorts on the Cotai peninsula. Operations were disrupted last summer by Typhoon Hato, which caused 10 deaths, according to Xinhua. While casinos continued to operate during that storm, the government estimated the economic loss to Macau amounted to 12.6 billion patacas (US$1.6 billion).

Casino stocks tumbled on Tuesday after Deutsche Bank lowered its forecast for revenue growth in Macau. It cut its 2019 outlook by more than half, to 4 per cent growth from 11 per cent previously, citing concerns about the VIP segment and saying Macau is at the start of a downward earnings revision cycle.

Source: freemalaysiatoday.com