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Galaxy Macau™ Resort, Cotai Strip, Macau, China: Opening date: 15 May 2011; 9 years ago No. Of rooms: 2,200 (1,500 in Galaxy Hotel, 410 in Hotel Okura Macau and 238 in Banyan Tree Hotel) Total gaming space: 550,000 m²: Signature attractions: Artificial beach and wave pool: Notable restaurants: Over 50 outlets: Casino type: Land-Based: Owner. Macau casinos report gaming revenue of MOP3.1b (US$386.6m) in February, a nearly 88% year-on-year decline following 15-day coronavirus shutdown.
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Introduction
A novel coronavirus “COVID-19” has caused the global pandemic of coronavirus diseases across China and worldwide since December 2019. This article aims to discuss the impact of COVID-19 on the Macau gaming industry, together with the government interventions and restricted casino operations.1 Macau has been relatively successful in containing the widespread community transmission by striking a careful balance between public health and economic needs. As of the end of August, the total number of coronavirus cases identified in the city is 46. All COVID-19 patients have recovered, and no death cases have been reported at the time of writing. With no immediate end to the current pandemic in sight, Macau casinos' operational adjustments could provide insight into the ongoing business activity under COVID-19, and that might also augur the future of gaming in other Asian jurisdictions.
Measures Against the Imminent COVID-19 Threat
Macau has been on high alert since the onset of the coronavirus outbreak in China. With the experience of the severe acute respiratory syndrome (SARS) epidemic in 2003, the Macau government and the broader community have taken preemptive measures to ensure public health safety in light of the imminent threat of COVID-19. Beginning in early January, most casinos and hotels have heightened their entry measures. Patrons with body temperature over 37.5°C (99.5°F) have been denied their access to the properties, and they would be asked if they had been to the Chinese province of Hubei (where COVID-19 was first discovered) in the past 14 days. Individuals with such travel history would be notified immediately to the local health authorities and sent directly to the hospital for a thorough check-up. It should be noted that Macau casinos generally keep a reserve of infrared thermometers and other necessary protective equipment for emergencies, even before the pandemic emerged.
The Macau government has introduced precautionary measures for tourists visiting Macau since early January 2020. As the first coronavirus case was confirmed in Macau on January 22, the city's Health Bureau promptly mandated that all gaming employees wear a protective face mask at work. In effect from 11:00 p.m. on February 1, the Gaming Inspection and Coordination Bureau (DICJ) requires that all patrons wear face masks at all times in casinos. Residents from Hubei province of China or individuals with recent Hubei travel history had once been barred from casinos, and they would be directed to the Judiciary Police stationed at casinos for follow-ups.2 A total of 405 casino entrances and 47 staff entrances across Macau casinos were also equipped with the body temperature measuring devices in early February. As a legally declared permanent zone for gaming,3 Macau further made a move to close all its 39 casinos.4 A city-wide suspension of casinos and entertainment facilities was imposed by the Macau government under Executive Order 27/2020,5 which suspended casino operations from February 5 through 19, for 15 days. This decisive action to close casinos aimed at preventing the spread of the coronavirus in the community at the time.
Casino Reopening and Preventive Measures
The temporary closure of Macau casinos was lifted on February 20 under Executive Order 39/2020.6 An extension period of 30 days was allowed for the reopening of casinos, and 29 casinos resumed their operations after the 15-day suspension.7 After the reopening, casinos have been instructed to follow the most recent executive orders, together with the safety precautions and technical guidelines issued by the Health Bureau and DICJ.8 Before proceeding to the preventive measures against COVID-19, it should be noted that Macau casinos were not fully operational during the early phase of reopening. It has been a gradual process of resuming the gaming areas (pits) upon meeting the public health criteria on a pit-by-pit basis. Furthermore, the post-closure casinos have operated at reduced capacity, with new arrangements of gaming tables and machines to ensure adequate distance among staff and patrons.
The COVID-19 prevention and control measures imposed before the closure have remained in place after the reopening. These precautions include the temperature checks on gaming staff and patrons entering the casinos, and face masks must be worn at all times in casinos. All individuals are also required to present the “Green Code” by completing the up-to-date health declaration through “Macau Health Code,” an electronic mobile application used to prove one's health eligibility.9 The following are the most recent anti-COVID-19 requirements and social distancing rules, which aim at reducing group gatherings around the densely packed gaming tables and machines in casinos.
Casinos are required to reduce capacity by 50% to avoid overcrowding, i.e., the number of employees and patrons should be maintained at 50%, or below, of the original capacity.
Individuals must always maintain an appropriate social distance. Specifically, table dealers and patrons remain spaced at least one meter apart while seated or standing. A maximum of three or four players can be seated per gaming table with one seat empty between patrons,10 and no onlookers are allowed. The “middle seat empty” policy also applies to the gaming machines.
Starting from July 15, patrons entering casinos have to present valid proof of a negative COVID-19 nucleic acid test result, in addition to the aforementioned body temperature check and “Green Code” upon entry.
All casino frontline staff (over 53,000 workers) are required to undergo a COVID-19 test. This requirement applies to any employees working in gaming operations, cage, security, and VIP gaming rooms (junkets), and no positive test results have been reported at the time of writing.
All promotional activities that attract gaming patrons must be suspended. The consumption of food and beverage at gaming tables is also prohibited.
There are technical guidelines on air conditioning, fresh air ventilation, and environment disinfection for casinos and hotel resorts. Deep cleaning and disinfection for all gaming facilities and equipment are required with increased frequency.
The circuit breaker mechanism has been adopted to reduce the risk of coronavirus spreading, i.e., one confirmed COVID-19 case could lead to another potential closure of casino(s).
Macau Casinos' Response to COVID-19
The coronavirus pandemic has made a profound impact on the Macau gaming industry. Macau welcomed 2.85 million visitors in January; however, the Chinese government has, since late January, suspended the issuance of visas for individual and group tours to the gaming enclave.11 Together with the city's border control and quarantine measures for inbound travelers, around 3.27 million visitors arrived in Macau in the first half of 2020, a year-on-year decrease of 83.9%.12 Meanwhile, Macau has recorded the steepest decline in casino receipts in recent decades. The gross gaming revenue for the first six months of the year is down 77.4% compared to 2019, and most of the revenue was generated in January (Table 1). Against this dire backdrop, Macau casinos continued paying their employees through the aforementioned closure in February along with the necessary operational adjustments.
| 2019 | 2020 | % change | |
|---|---|---|---|
| JAN | 24,942 | 22,126 | -11.3% |
| FEB | 25,370 | 3,104 | -87.8% |
| MAR | 25,840 | 5,257 | -79.7% |
| APR | 23,588 | 754 | -96.8% |
| MAY | 25,952 | 1,764 | -93.2% |
| JUN | 23,812 | 716 | -97.0% |
| JUL | 24,453 | 1,344 | -94.5% |
| AUG | 24,262 | 1,330 | -94.5% |
Source: Data are from the Macau Gaming Inspection and Coordination Bureau (DICJ). Unit: MOP million. The exchange rate is approximately 8 Macau patacas (MOP) per U.S. dollar.
The pandemic and widespread lockdowns have weakened the demand for gaming in Macau. Specifically, mandatory control measures such as cross-border travel restrictions, compulsory quarantine for inbound travelers, and business closures have adversely affected Macau and its casinos, which are highly reliant on Chinese visitors and their frequent patronage. In addition, the operational capacity for Macau casinos has been halved to meet the social distancing guidelines. Despite these severe constraints, Macau casinos have been closely co-operating with the anti-coronavirus measures mandated by the government. A number of operational and strategic actions have also been implemented in response to the COVID-19 impact and business disruption.
Navigating the COVID-19 impact
A range of cost-saving initiatives has been implemented across Macau casinos. Among other things, flexible work arrangements were introduced after the 15-day shutdown. Casino employees have been encouraged to take annual leave and/or unpaid voluntary leave, and casino operators have provided their employees with a variety of special leave options. Such options as “Care Leave” allow gaming employees to take one day voluntary time off (VTO) with the entitlement to one day of additional paid leave (“1+1 leave”). Some casinos even offer frontline staff with “Reward Leave” for applying for a prolonged period of time away from work. The overriding objective of these VTO options seeks to retain talent while saving operational costs and avoiding massive lay-offs. Given the unprecedented COVID-19 situation, these work arrangements have been generally accepted by most employees,13 and some casinos have already extended their VTO options into the first half of 2021.
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Macau casino operators have also taken a wide variety of strategic actions to prepare for operations beyond the pandemic. In particular, significant resources have been committed to talent and technology development. Various on-the-job training programs have been organized by most casinos to improve their employees' functional and leadership skills. Leveraging the current business downtime, most casinos have been refurbishing and continuously upgrading their casino floors with the latest gaming technology, including RFID-enabled gaming tables, artificial intelligence (AI)–powered camera systems, table performance and management systems,>
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