Consequences to the Macau Gambling Industry Due to the Typhoon Mangkhut

Rizk Casino


Staff member
May 3, 2008
Macau is the direct rival to the all-time-favorite Las Vegas. It is home to hundreds of casinos and hosts millions of high-rollers annually. In fact, Macau has twice the gambling revenue than Vegas, although Vegas has double the number of casinos. So clearly, Macau is the hot gambling destination. But also, it is a region prone to typhoons. Just last year, the typhoon Hato struck Macau and left 10 victims behind it and thousands of injured.

During last year's typhoon, the casinos at Macau were open and working at full speed. This year, just a few days ago, Macau was struck by another super-typhoon. The typhoon Mangkhut packed winds of over 124 miles per hour and was proclaimed as one of the strongest storms this year around the whole world. There was a massive destruction involved, with victims, injured, power cuts, and major floods.

How Did the Typhoon Affect the Casinos?

After the last year’s typhoon Hato, the casino personnel filed a complaint to the government out of fear for their safety and protested having to work while a terrible storm was taking place. That is why the government proposed a new bill that would allow them to shut down the casino establishments in times of serious crisis, such as typhoons.

This is why Macau's Civil Protection Operations Center issued an order to all casinos to suspend their gambling activities effective immediately at 11 pm on Saturday. The government further reminded the operators of their agreement to protect the guests and the staff upon typhoon contingency play. Four casinos that Saturday, upon request, shut their doors as early as 1 am, the ferry services were suspended, and that led to the shutdown of all the Macau’s casinos after the Bureau rang the alarm about the severity of this typhoon of level 8 (out of 10). The casinos were forced to close their doors for 33 hours, starting Saturday night.

What Financial Consequences Suffered the Gambling Industry?

With the 33-hour shutdown, the estimated damage to the casino industry was over $186 million. It was the first time since they have received their gambling licenses in 2002, the Macau casinos to close down. In the past 16 years, Macau became the Las Vegas' sole competitor, with billions in revenue.

The financial consequences of this (seemingly short) shutdown are 7% revenue decrease for casino operators, which might result in only a slow 12% growth by the third quarter, analysts say. In addition to the revenue loss, the majority of casinos are facing floods and different damages to their respective establishments. Most of them are affected by the flood and the waste. Roadblocks, fallen trees, shuttered windows, and streets submerged in water make it impossible for neither the personnel nor the players to access most of the casinos. Although some casinos reopened on Monday morning, many are still struggling to clean up the mess left by the typhoon. In fact, it was reported that 4,000 tonnes of waste was collected from the typhoon.

However, casino operators were not the only ones affected by the typhoon. There was a market drop, causing gaming stocks to fall fast. The Bloomberg Intelligence index fell 2.1%, the Hang Seng index 1.8%, the Galaxy Entertainment Group 4.6%, the Wynn Macau 3.2%, while the Melco International Development index fell as much as 5.7%.

What Happens After the Storm?

Well, as for Macau, it started picking up the pieces and getting on its feet. In fact, the third night 2018 Macao International Fireworks Display Contest, which was scheduled for the last Friday and then cancelled due to the typhoon has been rescheduled for this Friday, the 21st.

In terms of the casino industry, analysts, as well as the firms, are predicting a growth in GGR. There are three facts that contribute to this prediction. First, there is the fact that the Macau Statistics and Census Service in 2017 reported an 8% increase in visitors, and there is 13% increase of middle-class gamblers coming from mainland China to Macau. The second fact is that Macau casinos had 25 months of growth straight, so as soon as they recover from the material damage, they are expected to get back to their feet soon enough.

And finally, the forthcoming opening of the Hong Kong-Macau will further speed up the recovering process. In fact, it is the perfect combination of events. With the of middle-class gamblers increase that would come from mainland China to Macau through the bridge, Macau will see the light soon enough. In fact, this is what the gambling analyst Davit Katz reported, that he expects the revenue growth to pick up right after the opening of the bridge.
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