JAKARTA - Macau authorities decided to close all casinos for the first time in more than two years on Monday, causing shares of its managing company to plummet, as measures were taken to curb the spread of the COVID-19 virus in the region.
More than 30 casinos and other businesses in the city will be closed for a week, while residents have been ordered to stay at home, although short trips for essential services are allowed.
Police will monitor the flow of people outside and harsh penalties will be imposed on those who disobey, the government said.
Although many casinos have effectively closed over the past three weeks with only a handful of staff allowed, the more drastic measures hit investor confidence hard.
Some analysts predict that a recovery in gambling revenue may not occur until the end of the third quarter or during the fourth quarter.
"We may need to remove July and possibly August as well from the model," said DS Kim, an analyst at J.P. Morgan, cited from Reuters, July 11.
Shares in Sands China plunged 9 percent, while shares in Melco International, Wynn Macau, SJM, Galaxy to MGM China fell between 6 percent and 7 percent, respectively.
Macau has recorded around 1.500 COVID-19 infections since mid-June. Some 19.000 people are in mandatory quarantine as the government adheres to China's "zero-COVID" policy which aims to eradicate all outbreaks, contrary to the global trend of trying to coexist with the virus.
More than 30 zones in the city deemed high risk are now on lockdown, meaning no one will be allowed in or out for at least 5 days. While the government said it had not imposed a city-wide lockdown, the strict measures meant Macau was effectively shut down.
The last casino closed in Macau in February 2020 for 15 days. The previous government was hesitant to close casinos because of its mandate to protect jobs. The industry employs the majority of the population directly and indirectly and accounts for more than 80 percent of government revenue.
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Residents will be asked to take mass COVID-19 tests four times this week. Previously, they had been tested six times since mid-June and were expected to perform daily rapid antigen tests.
More than 90 percent of Macau's 600.000 residents have been fully vaccinated against COVID-19, but this is the first time the city has had to grapple with the fast-spreading Omicron variant.
As a supportive measure, authorities have added two hotels in the popular casino resort to be used as COVID-19 medical facilities as they try to increase capacity to deal with the spike in infections.
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