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Betting Takes a Back Seat in Macau on Coronavirus Fears

The coronavirus pandemic has hit gambling hubs — Macau and Las Vegas — hard.

Although most of the casinos in Macau have resumed operations after coronavirus-induced shutdown, casino tables are still empty. This has resulted in sharp decline in gross gaming revenue (GGR) in March. Gaming revenues from the world’s largest gambling hub fell for the sixth consecutive month.

In March, gaming revenues from Macau plunged 79.7% to 5.26 billion patacas ($658.7 million) following a decline of 87.8% in February. The decrease can be primarily attributed to a reduction in footfall as China continued to decline individual and group visas to Macau as a safety precaution. In fact, Macau has put restrictions on all non-residents who have recently traveled abroad. The government has also enforced body temperature check at casinos entrance.

Moreover, in the first three months of 2020, gross gaming revenues declined 60%, year over year to $30.48 billion patacas ($3.8 billion). Notably, the casino operators in Macau were already grappling with a slowdown in China, and the trade war between Beijing and Washington. The outbreak has only aggravated their woes.

2020 Shaping up to be Forgettable One for Gaming Industry

Macau is likely to record revenue decline in the rest of the year as well. The government has reduced 2020 Macau gross gaming forecast by half. It now anticipates gross gaming revenues to be 130 billion patacas ($16 billion), compared with the prior estimate of 260 billion patacas.

Macau economy in 2020 is likely to suffer as gaming revenues account for 80% of tax revenues collected by the Macau government. The local government is trying to boost spending by giving vouchers worth $375 to citizens, which can be spent on anything in Macau.

Moreover, gambling industry is also suffering in Las Vegas, which is one of the hottest spots for gamblers, due to coronavirus outbreak. Casinos in Las Vegas are closed to contain the spread of virus. Countries like Australia, South Korea, the Philippines and Cambodia have also closed casinos due to the coronavirus-induced crisis.

Casinos Stocks Loses Market Cap on COVID-19 Fears

Shares of Wynn Resorts, Limited WYNN are down 61.1% year to date. In the past 60 days, estimates for the current year have been revised downward by 88.1% to 66 cents. The company currently has a Zacks Rank #4 (Sell).

Shares of MGM Resorts International MGM have declined 63.3% year to date. The company’s performance in 2020 will be impacted by the coronavirus outbreak. The Zacks Rank #3 (Hold) company’s earnings estimates for current quarter and year have declined 32 cents and 97 cents, respectively, in the past 60 days.

Shares of Las Vegas Sands Corp. LVS have tanked 41.6% year to date. In the past 60 days, estimates for the current year have been revised downward by 15.5% to $2.51. The company currently has a Zacks Rank #4.

Shares of Melco Resorts & Entertainment Limited MLCO have declined 49.2% year to date. The company, which develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia through its subsidiaries, has been impacted by the deadly virus as well. The Zacks Rank #3 company’s earnings estimates for current quarter and year have declined 72 cents and $1.54, respectively, in the past 60 days.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Click to get this free report Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report MGM Resorts International (MGM) : Free Stock Analysis Report Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report Melco Resorts & Entertainment Limited (MLCO) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research