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Thought we were past the dangers of Covid lock-downs? So did we! But now, casino operators like MGM, the Las Vegas Sands, and Wynn Resorts are learning the hard way that the Coronavirus can still hurt them… even from thousands of miles away.
Casinos in Macau have been dark for several days now, shut down due to a new Covid outbreak. These American companies all have a lot invested in that market, and each could lose millions of dollars if things do not improve quickly.
Already, the Las Vegas Sands has reported second quarter results which show that reduced visitors and restrictions in Macau have taken a toll on profits. The company reported a net loss of $414 million, compared to just $280 million from this same time last year.
Both Wynn and MGM also depend on hundreds of millions of dollars from Macau and have seen significant revenues decline so far this year. Their most recent earnings reports also point to Macau, with the travel restrictions and casino closures being a culprit.
Macau is the biggest gambling mecca in the world, and these US gaming companies have invested billions of dollars into the market. Now, they cannot maintain growth or profits against the Coronavirus mitigation strategy of the Chinese government.
The casino closures in Macau are set to be lifted this weekend, but they’ve already been extended once. Even if the casinos do open, that does not mean that visitors will flock back to the city. Casinos there have had almost no revenue since the middle of last month when all this started. Now, many industry analysts believe they will see little to no income in the coming months.
For the sake of MGM, Wynn, and the Las Vegas Sands, let’s hope the Chinese can get a handle on this situation sooner rather than later. But the truth is that casinos have been spending hundreds of millions of dollars in operating expenses since restrictions began, even before they were ordered to close.