Macau extends city-wide lockdown amid struggle to contain Covid-19

Macau reported 31 infections for Saturday, suggesting the lockdown wasn’t enough to stop local transmission.

Macau will extend a city-wide shutdown as the gaming hub struggles to contain its worst ever Covid-19 outbreak, prolonging the plight of casinos which are burning through millions of dollars every day and earning no revenue.

FILE PHOTO: People wear masks as they walk near Ruins of St. Paul’s, following the coronavirus outbreak in Macau (REUTERS)

All non-essential businesses are required to remain close through July 22, authorities said in a statement Saturday, extending measures that began July 11 and were initially due to last a week. The government will allocate another 10 billion patacas ($1.24 billion) to fund alleviation programs for those affected by the outbreak, it said in a separate statement.

Macau reported 31 infections for Saturday, suggesting the lockdown wasn’t enough to stop local transmission. Over the past week, almost all businesses including casinos were shut, and residents were banned from leaving home except for buying groceries and caring for others. Essential services such as supermarkets, pharmacies, hotels and water and gas utility services remained open.

The outbreak, which started June 18, has swelled to a total of 1,706 infections. While small by global standards, it’s the largest ever flareup for the city of 680,000 residents.

Macau’s struggle to tame infections means casinos, which account for 80% of government income and one third of local employment, face prolonged headwinds to any recovery. With China facing Covid flareups and having suspended quarantine-free travel for weeks, that meant the enclave’s largest source of tourists has essentially dried up.

Casinos are likely to miss out the entire summer holiday travel season with the extension of the shutdown because China typically waits two weeks after local cases reach zero to reopen the border, said Morningstar Inc. analyst Jennifer Song. The next period for an uptick in travel would be in early October during China’s national day holiday period, she said.

“The biggest impact would be on gaming operators’ liquidity,” said Song. “Some of them only have months to go if the situation of near-zero revenue continues.”

The industry was burning through a combined $20 million a day in the second quarter, according to estimates by JPMorgan Chase & Co. analysts including DS Kim. In a worst-case scenario, where there’s no revenue and no additional funding, most operators can only survive between nine months to two years, Kim said.

If casino operators were to provision 5 billion patacas for bidding for new licenses, SJM Holdings Ltd. would only have one month of liquidity and Sands China Ltd. six months, he said.