Southeast Asia has been one of the hotbeds for casinos and gambling in the world, with many countries having certain destinations which have now become famous for their gambling venues, and are thus tourist hotspots and also attract crowds of people who want to indulge in their gambling habits.
Macau is the biggest example of this, as the city has taken advantage of its special rights to be able to host casinos and has become known as the Las Vegas of the East, even having a stretch of land modeled on the Las Vegas Strip, known as the Cotai Strip, with huge casinos and hotels lining the road on either side. However, all these venues have been hit extremely hard by the coronavirus pandemic, with crowds falling to a trickle, and thus raising serious questions about the long-term financial health and safety of these casino businesses.
Manila’s Entertainment City, another one of South-East Asia’s casino hubs, has been virtually empty for the past two months, as the area was shut down due to the pandemic.
Even when areas are reopened, crowds are likely to remain sparse, as people take precautions and stay home, and governments maintain strict restrictions on travel. Foreign tourists are virtually out of the question at the moment, while locals will likely remain indoors and choose to save their money in such uncertain times where economic losses are also rising across almost every industry and sector. There are already instances of casino businesses having to close, with Australian company Silver Heritage Group having to enter administration following the closure of its properties in Nepal. Another company, the Hong Kong-listed Imperial Pacific International group, has warned that its casino in Saipan would need to close if it was forced to pay $5.6 million to a contractor through a court judgement.
One interesting development which could see an acceleration is the increase in legalization of online casinos in countries where they are currently not permitted. South Korea is one such example, where lockdown measures have been extremely strict, and thus casinos have been facing a huge fall in revenues. In such a scenario, it may be likely that the government allows the operation of online casinos in the country, with top online casinos permitted to offer services to Koreans to allow them to maintain cashflow.
The lack of crowds upon reopening can be seen from the example of Macau, which was shut for just 15 days, and yet, for the first 24 days of May, daily casino revenue in the territory was down a staggering 96% over the same period last year, and the forecast for the whole of 2020 is that there will be a fall of over 40% in revenue. Most casino operators have thus been forced to cut dividend payments, or even suspend them entirely, and many of these are reporting losses for the first quarter of the year.
However, the silver lining in all this is that Macau’s casinos have enough cash to be able to meet their payroll needs for the rest of the year, and are also continuing with construction on their existing projects. In fact, the Las Vegas Sands group is pressing ahead with its plans to open the Grand Suites Tower at the Macau Four Seasons in June, while Melco Resorts is also on track to complete its renovations and reopen the Nuwa hotel at its City of Dreams resort.