On June 28, the Mainland Chinese government cut the quarantine period for international visitors by more than half, from 21 days to 10, including seven days in isolation at a centralized facility, such as a hotel.
The change doesn’t mean the government has relaxed its zero-Covid policy, but it could provide a boost to Macau’s gaming industry, and some analysts were buoyed by the news. Brokerage JP Morgan Securities (Asia Pacific) said in a note that “the easing itself would not move the needle for Macau’s gaming revenues.” But analysts DS Kim and Livy Lyu said the announcement “was quite surprising.”
“We and most investors were expecting any meaningful easing to come only after the [Chinese Communist] Party Congress toward year-end,” they wrote. “One can say this is a much-needed step in the right direction toward a (very) gradual normalization, i.e., it was a good enough directional signal in our view.”
According to GGRAsia, brokerage Sanford C. Bernstein agreed that the quarantine easing is “a step in the right direction,” especially as the latest viral surge exceeded 400 cases last week.
Bloomberg News called it “a first significant step towards life after Covid-19” in Macau.
Bernstein’s Vitaly Umansky, Louis Li and Shirley Yang added, “We need to see what further positive changes are made and when. So far it is clear China is sticking with the zero-Covid policy. With Covid outbreaks easing across China, domestic travel is seeing some uplift … however, the outbreak in Macau and the new ‘sixth wave’ in Hong Kong will likely keep current travel policies and restrictions in place for travel between China and HK/Macau until those are brought under control.
“There is still no clarity about when border easing for Macau will occur,” the team continued. “In the end these changes are needed to see a rebound for Macau business. We are positive longer term on Macau recovery.”
Macau gaming stocks were up on the news, with every concessionaire experiencing a boost. They ranged from a 7.7 percent increase for MGM China on Tuesday to a lift of 12.8 percent for Wynn Macau.
Starting July 1, per Macau Business, the local government required all people entering Macau’s casinos, including staff, customers and government personnel, to display proof of a negative nucleic acid test (NAT) obtained within the previous 48 hours. Employees must also take a rapid antigen test (RAT) upon arrival for each shift. The cost of employee tests “will be the responsibility of the gaming company,” according to a government memo.
The Gaming Inspection and Coordination Bureau (DICJ) reminded casino visitors to maintain social distancing and also to wear face masks.
“Individuals … must cooperate with anti-epidemic prevention measures in order to reduce the risk of spread” of infection, the regulator said. It added it would “continue to strengthen epidemic prevention inspections in casinos.”
Meanwhile, the DICJ has also called on casino operators to reduce the number of personnel working on gaming floors.
Macau Chief Executive Ho Iat Seng said the latest outbreak suggests that the carriers were infected with the Omicron subvariant BA.5.1, which he said is currently prevalent in the United Kingdom and the United States.
It’s been a tough year for Macau gaming, and 2022 will likely end with gross gaming revenues (GGR) closer to those of 2020 when the pandemic first started than in 2021, gaming expert and 2NT8 managing director Alidad Tash told the Macau News Agency.
“The impact of the pandemic was devastating, but at least there was a small recovery last year,” said Tash. “Despite the effective junket shut down last December, there were rays of enthusiasm for a mass recovery in 2022. In fact, at the beginning of the year, many analysts, including me, were predicting 2022 to improve to at least 40 percent of 2019’s figures, a continued improvement.”
Those hopes were dashed by the latest outbreak. In 2020, GGR totaled MOP60.4 billion (US$7.4 billion), down 80 percent from 2019. Tash called 2022 “a step backwards instead of forward.”
