MACAU will keep its casinos open, while shutting other entertainment venues, as the world’s largest gambling hub tries to contain its worst-ever Covid-19 outbreak.

Bars, nightclubs, cinemas, gyms and hair salons will close from 5pm local time on Thursday, and restaurants will suspend dining-in services, according to a government mandate, which didn’t specify how long the curbs will last. Macau has already shut schools and public venues, and is conducting mass testing to weed out hidden chains of community transmission as the number of infections in this outbreak climbed to 110 from 71 a day earlier.

The outbreak is being driven by the omicron sub-variant BA.5, said health officials.

Casinos are not affected by the restrictions for now and the city hasn’t shut the venues since an unprecedented 15-day closure in February 2020. Authorities will only close individual casinos if they find a case in gaming spaces, Macau’s CEO Ho Iat Seng said at a briefing on Thursday, citing an agreement reached with operators following the 2020 shutdown.

Back then, the city lacked effective testing measures, and the situation is different now, Ho said. Macau has so far identified four casino workers who are infected and one close contact, but none of the cases entered gaming areas during the relevant period, according to authorities.

A suspension “would affect a lot of our residents working at casinos,” Ho said. “As a Macau resident, we want to take care of the livelihood of our Macau employees.”

Adding Pressure

Macau’s tighter social-distancing restrictions are likely to deal another blow to the city, which has been struggling with a dearth of tourists and slumping revenue as mainland China’s Covid Zero policies discourage travel to the enclave. Beyond the virus, the casino industry, which contributes to 80% of the government income, is facing other challenges including a new law that significantly increases government control over operations and Beijing’s crackdown on high-rolling gamblers to curb capital outflow.

Macau’s gross gaming revenue plunged more than 60% year-on-year in both April and May, while visitation has remained at less than 20% of the pre-Covid levels in 2019 since the beginning of the year. Casinos are already burning through millions of dollars of cash each day. Most only have enough liquidity to survive between nine months and two years, JPMorgan Chase & Co analysts including DS Kim wrote in a note on Sunday.

A Bloomberg Intelligence gauge of Macau casino stocks was 0.4% higher, though it’s still down about 26% this year.

For now, Macau remains quarantine-free for travelers from low-risk areas in mainland China, the largest source of its tourism, while a 10-day quarantine is required for those who enter from Hong Kong, Taiwan, Portugal and some high-risk mainland regions. It is otherwise shut to the rest of the world.

Macau can’t live with Covid because it shares its border with mainland China, according to Ho.

The neighboring mainland city of Zhuhai has further tightened its border restrictions for visitors from Macau, requiring seven days of quarantine at designated facilities and another seven days of self-health monitoring. Before the outbreak, arrivals didn’t have to undergo any isolation. Zhuhai has also locked down some areas after finding a small number of imported infections from Macau.

Macau will determine whether it will impose broad movement restrictions on residents after it completes its second round of testing, with authorities previously announcing they expect to release those results by Saturday morning. The city will be divided into different zones if a lockdown is implemented.

People living in buildings where two positive cases or more are found will be confined to their apartments for at least five days or until everyone tests negative, said officials. They’ll still be allowed to leave their buildings briefly to get tested, fetch daily supplies and access urgent medical care.

Overall, the Covid situation remains controllable and the city has sufficient daily supplies, Ho said. – Bloomberg