Gamblers Flock Online as Chinese Casino Industry Closes Due to Virus Outbreak

by
Joe A.
14th February, 2020

A research institute has predicted that casinos in China will remain closed for a while longer amidst the corona virus outbreak, leaving the online casino as the only reliable option for Chinese gamblers for now.

Prediction

The prediction was made by brokerage firm Sanford C. Bernstein Ltd., which is an investment research and institutional asset management company. According to the company, there is a big chance that the current shutdown order which forced Macau’s casinos to temporarily close amidst the virus outbreak might be extended.

A note issued by Sanford C. Bernstein Ltd read: “Forecasts for the near term (i.e. first-half 2020) are largely guesses at this time, with the biggest variables being when casinos reopen, and even more importantly, when travel restrictions from China will be lifted.”

The investment research company did not detail why it thinks there is a “strong possibility” that the current shutdown will continue and how long this could last.

Casino closure

The closure order of casinos in Macau, which is the biggest gambling destination not only in China but in the entire world, is set to expire on 20th February. So far Macau’s local government has not yet made any signals whether the casinos will remain closed for longer or whether operations might resume as normal.

Already before the casinos were ordered to close by the semi-autonomous Chinese city state did they suffer from low visitor numbers due to travel permits for individual Chinese visitors being frozen. Mainland China also issued a ban of tour groups leaving the country out of fear of travelers spreading the virus across the world.

china macau online casino

Macau’s casinos have been closed down amidst the corona virus crisis. ©Screenshot

Corona virus

The corona virus, now officially named COVID-19 (after COrona VIrus Disease 2019), originated in the Chinese city of Wuhan where it has halted public life completely. It has spread from Wuhan to every single Chinese province and several nations across Asia, Europe and North America.

In Macau, there have been 10 confirmed corona virus cases, including three local citizens wh have not visited Hubei Province in which Wuhan is located and thus must have been infected elsewhere.

Currently, there are 64,439 confirmed cases of the novel corona virus. The overwhelming amount of infected people, 63,852 patients in total, hail from mainland China. So far, 1,383 people have died from the virus infection according to official statistics.

Macau downturn

The virus outbreak couldn’t have come at a worse time for Macau as the city’s casinos have already been struggling in the last months.

Last month, the local authorities of Macau had announced that the territory’s gross gambling revenues of the entire year of 2019 are 292.5 billion patacas (the local currency used in Macau – also abbreviated as MOP) which equates 36.5 billion USD or 32.7 billion EUR.

This means that 2019 marked a 3.4 percent downturn when compared to the full data for the year of 2018. Despite the bad yearly results Macau is however still the world’s biggest casino destination in the world, still leaving Las Vegas in second place.

macau casino lights china

The bright casino lights of Macau. ©Screenshot

Reasons behind the decline in gambling revenue

According to analysts, there were several reasons behind the decline in gambling profits. One of the factors mentioned was a visit by Chinese President Xi Jinping to Macau to celebrate the 20 year anniversary of Macau becoming part of China after the Portuguese handed over control of their former colony. Xi Jinping’s arrival meant that the territory temporarily restricted its visa policy and freedom of travel, as well as strengthening border security, which had an effect on visitor numbers.

Other reasons mentioned were the ongoing trade war between China and the United States which slightly affected the economy, as well as the protests in nearby Hong Kong against the local government.

Hong Kong protests

Even though Macau itself did not see any uprising against the Chinese government, the citizens in Hong Kong did rise up against the local government, which has strong ties with Beijing. The reason behind the protests was a controversial extradition law which could see Hong Kong citizens being extradited to mainland China to face criminal justice. Many Hong Kong citizens see the move as an attack on Hong Kong’s autonomy and liberal society by the Chinese Government.

Protests have frequently turned violent – with the Chinese and Hong Kong authorities blaming the protestors and Hong Kong citizens blaming Chinese provocateurs. Several times last year, protests at the airport have even completely halted flight traffic into Hong Kong. As Hong Kong Airport is a major entry hub for Macau – which is only a short bus or ferry ride away – the protests have also massively impacted Macau.

Online casinos

According to economical analysts, Macau also faces increased competition from other Asian gambling destinations such as the casinos of Vietnam which have proven to be a hit among Chinese and other Asian tourists.

The rise of the online casino industry has also impacted Macau as Chinese gamblers can now easily play online as well and do not have to travel all the way to Macau to place a bet. As the casinos currently remain closed, it seems that the online casino will only grow in popularity as they can be accessed anytime from anywhere in China and the wider world irrespective whether or not there is an ongoing virus crisis.

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