Typhoon Mangkhut Brings Gaming To A Halt in Macau
Macau’s gambling empire functions on a 24/7 basis bringing in millions to casino operators on a weekly basis. The gambling hub was dealt a huge blow over the weekend as casino operations were brought to a halt due to Typhoon Mangkhut. Among the major operators affected are Wynn Macau Ltd and Sands China Ltd.
The gaming shutdown which started at 11pm on Saturday has investor worried as the shutdown continued on Sunday as Typhoon Mangkhut swept through the region before moving on to neighboring Guangdong Province in China.
This was also the first time that the world’s largest and most prominent gambling hub suspended gaming operations since casino licenses were granted in 2002.
Operations are expected to return to normal once the typhoon is out of the region and the conditions are assessed which could be towards the end of Monday.
The decision to suspend gaming operations was backed by industry officials and junket operators as this will ensure the safety of employees. Stephen Lau of Power Macao Gaming Association which represents casino workers, praised the government and casino operators for putting employee safety and priority over their profits.
South China Morning Post
Growth Forecast Downgraded
Grant Govertsen, analyst at Union Gaming Securities Asia Ltd said the shutdown will have a direct impact on revenue as weekend days generate a much higher income than midweek days. Up to MOP 1.5 billion in gross gaming revenue (GGR) is expected to be lost due to the blanket closure, and revenue growth for September could range from 7.7 percent to 9.3 percent compared to the initial forecast of 14.7 percent.
Deutsche Bank Securities Inc. also reduced its growth estimate from 14% to 3%, citing disruptions and travel issues over the coming days. It downgraded its 2019 outlook from 11% to 4% and said that Macau is beginning to suffer downward earnings. Morgan Stanley analysts remained positive that casino shares will recover and may be poised for a 50% rebound.
Typhoon Hato
This is the second time in a little over a year that Macau casinos were hit by a major typhoon. Back in August 2017, operations were also disrupted by Typhoon Hato which caused significant damage to property and lives in Macau. The casino industry did not shut down during this typhoon but still incurred an estimated 12.6 billion patacas (US$1.6 billion) in losses.
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