Macau casino stocks slumped on Monday as the Chinese gaming hub battled a Covid-19 outbreak that has prompted tightened social distancing restrictions and mass testing.
The sector has been hammered by the pandemic, with vital tourism revenues wiped out by some of the world’s harshest measures to tackle the virus — including tough border controls, weeks-long quarantines and targeted lockdowns.
Case numbers are small by global comparison, with only 34 found so far in citywide mass testing according to local media, but the outbreak sent casino stocks tumbling.
Sands China fell as much as eight percent while Wynn Macau dropped more than seven percent, though both partially recovered.
A Bloomberg Intelligence index of Macau’s six major casino operators fell as much as five percent, taking their total losses this year to 28 percent.
The virus has been kept largely under control in Macau but the government said a chain of transmission discovered on Saturday posed an “extremely high” risk of community transmission.
Citywide mass testing, expected to take place over 48 hours until Tuesday, had covered almost 340,000 people by Monday morning.
Government offices and banks are shut, dining in has been suspended at restaurants, school lessons have been cancelled and residents have been asked to stay at home.
Macau’s casinos usually account for about 80 percent of government revenue and more than half of the city’s gross domestic product, with nearly a fifth of the working population employed by the industry.
Almost all gambling is forbidden in mainland China but it is permitted in Macau, a former Portuguese colony that boasts a casino industry bigger than Las Vegas.
The pandemic is not the only challenge the sector is facing.
Chinese President Xi Jinping’s anti-corruption campaign has seen increased scrutiny of big-spending gamblers and corrupt officials who might travel to Macau to launder money.
In September Macau announced plans to criminalise underground banking in the industry and place government representatives on the boards of casino operators to oversee their dealings.
However, when the new rules were unveiled at the beginning of this year they were less punishing than expected.
The six major casino operators are all required to bid again for their licences this year as they have expired.