Macau Recovery Takes a Hit as Casinos Asked to Reduce Workforces by 90%

Analysts with the Sanford C. Bernstein brokerage recently pointed to relaxed quarantine protocols in China as a good sign for Macau’s recovery. However, a request that casinos in the SAR reduce their workforces by up to 90% may have a different outcome.

Macau residents line up to buy face masks at a pharmacy. A new COVID-19 wave could threaten casinos once again. (Image: Macau Photo Agency/Unsplash)

GGRAsia, citing local media outlets, reported today that Macau’s gaming regulator sent a request to Macau’s casino operators. The Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) wants them to temporarily reduce the number of workers on the city’s gaming floors. This request is made as Macau fights the worst COVID-19 pandemic since it began in early 2020.

The reduction will be effective from today through at least July 8. However, the DICJ has not made an official announcement confirming the request.

COVID-19 Threat Rising in Macau

The Macau government announced yesterday that it had abandoned plans for mandatory nucleic-acid test certificates. It planned to introduce the requirement today, and was to apply to casino staff, customers and officials visiting casinos and gaming properties. Although it was intended to stop the spread of COVID-19, the government realized that making people stand in long lines to be tested could allow the virus to propagate.

Cloee Chao, a local gaming labor activist, confirmed to GGRAsia that a few frontline casino workers received calls from their employers about the reductions. Those unidentified companies offered them incentives to avoid their workplaces between July 1 and July 8.

In addition, SJM Holdings Ltd sent a memo to its employees offering a “special home-leave program.” Employees who volunteer to take seven paid or unpaid days of leave will receive one extra day of paid leave as a bonus.

Macau began shutting down its commercial industry a week ago, although casinos remained opened. By the end of the day on June 19, there were 31 new COVID-19 cases, and concerns over a new outbreak increased.

Macau health officials reported yesterday that there are now 570 positive cases. In addition, another 7,000 people are living in mandatory quarantine. In neighboring Hong Kong, the problem is worse, with a daily average of 2,000 new cases.

Macau Gaming Continues to Suffer

Macau casinos suffered near-catastrophic results during the first wave of COVID-19. As a result, casinos shut down for months, greatly impacting revenue. This, in turn, also impacted Macau’s government. The numbers are still way off, with May of this year contributing only 13% of May 2019’s results.

The casinos aren’t alone, however. The economic situation at Macau Jockey Club continues its decline. The losses for the entire year were MOP1.9 billion (US$240 million), according to its latest financial health report.

The Macau Horse Racing Company, the administrator of the Jockey Club, reported a loss in 2020 of MOP1.7 billion (US$212.5 million) against revenue of MOP47 million (US$5.8 million). However, things began to turn around this year when the company reported MOP10 million (US$1.23 million) in horse betting gaming revenues for the first quarter.

However, if the current COVID-19 trend in the city continues, things may turn in the opposite direction. Macau knows it needs its gambling operations to return to normal, which is one of the main reasons they are still operating amid the spread of the virus. However, if things get out of hand, the government won’t have a choice but to shut them down.

The Macau Jockey Club employs around 800 people and is one of the most prominent private employers in Macau. It was previously known as the Macau Trotting Club, but it was sold to a new owner in 1989 and became the Macau Jockey Club.

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