Almost all bets are off: Casino capitals Macau, Las Vegas slammed by virus

first_imgTopics : The S&P 500 casinos and gaming index has lost 51% this year, more than double the 24% dip in the S&P 500.Macau’s gaming revenue fell 80 percent in March from the year before, according to government figures. It fell 88 percent in February when authorities suspended casino operation for two weeks. Analysts expect April’s numbers to show an even sharper drop.The former Portuguese colony, now a special administrative region of China, gets more than 80% of tax revenues from the gaming industry, which employs about three quarters of the territory’s 600,000 population, either directly or indirectly.Macau’s government said last week it was “ready for the worst” and pledged to support small businesses and workers financially. It is effectively leaving casino operators – which have reaped huge profits over the past two decades of rapid growth – to deal with the dip in business themselves. The vast, glitzy gaming halls of Macau are open, but thousands of baccarat tables are empty. The world’s biggest gambling hub has barred entry to most travellers and hotels are being used to isolate new arrivals in case they have been infected by coronavirus.In Las Vegas, the casinos have been forced to close in order to prevent the spread of the disease. The same has happened in Australia, South Korea, the Philippines and Cambodia.The global business of gambling – which thrives on air travel and large groups of people in close proximity – is one of the hardest hit as the world goes into lockdown.center_img “This is a test to the new government and a big test to the six gaming operators,” Macau leader Ho Iat Seng said last week as he criticized the casinos for not initially cooperating with a government plan to use their hotels as quarantine facilities, although some have relented. “What social responsibilities should they bear?” he asked.Macau’s government has forced operators to safeguard the livelihoods of gaming workers, ordering one company last month to rehire over 200 staff it had laid off due to the drop in business caused by the coronavirus.Following that incident, Macau’s gaming regulator sent notices to all casinos warning them to maintain employment of their local staff, it said in an email to Reuters.That puts additional pressure on Macau’s casino operators – Sands China Ltd, Wynn Macau Ltd, Galaxy Entertainment Group, Melco Resorts & Entertainment Ltd , SJM Holdings Ltd and MGM China – as uncertainty looms over what the government will do ahead of the expiration of their operating licenses in 2022.They are already feeling financial pain, spending between $1.5 million to $4 million each day just to stay open, according to analysts, as revenues approach zero. Bigger operators like Sands and Galaxy would normally rake in $25 million in revenue a day.Given the government’s support, workers are not panicking about losing their jobs, at least yet.“Many people in Macau can feel the government is helping,” said Tai Wai Hang, vice chairman of Macau’s Gaming Employees Home, a local labor group.Casino workers’ primary concern is being infected.“There’s not enough prevention. They don’t separate the security, the visiting medical staff and us, what’s the point of being quarantined?” said a restaurant worker who identified himself only as Li, at a hotel designated for quarantine.Macau’s government has reported 41 cases of coronavirus but no deaths.Vegas closedIn the United States, Nevada forced all casinos to close in mid-March, prompting mass layoffs.The state’s casinos – alongside most other U.S. companies – are eligible to tap into a $454 billion financial assistance package for impacted businesses included in the U.S. government’s $2 trillion relief plan passed by Congress last week, according to the American Gaming Association.How much that will help companies like Las Vegas Sands Corp , Wynn Resorts Ltd and MGM Resorts International is hard to tell.”This is unprecedented compared to anything I’ve experienced in 40 years of working in the industry,” said Debra Jeffries, a cocktail server at Bally’s Las Vegas, owned by Caesars Entertainment Corp, who lost her job along with many others when casinos closed.Jeffries said she will apply for unemployment benefits from the state and could last a little while longer due to her savings, but said most of her colleagues live pay check to pay check. “We don’t know how long this is going to last,” she said.The Nevada Resort Association said the situation was not sustainable and the state’s unemployment rate could hit 30%, with 320,000 employees relying on $1.3 billion in wages and salary per month at immediate risk.As of Tuesday, Nevada’s Clark County, which includes Las Vegas, had reported 961 cases of coronavirus and 28 deaths. In South Korea, shuttered casinos have put thousands of employees on temporary leave, while Australia’s Star Entertainment Group said it was laying off 90% of its 9,000 or so employees.South Korea has reported 9,887 coronavirus cases and 165 deaths, while Australia has reported 4,864 cases and 21 deaths. For an interactive graphic tracking the global spread of the coronavirus, open in an external browser.An official at South Korea’s largest casino operator by revenue, Kangwon Land Inc, said nearly 80% of its employees had been put on temporary leave.Companies dependent on the casinos for business have been impacted.“It [business] is expected to get worse as time passes and we are going to have to close some time before April 6,” said the manager of a 62-room hotel located near Kangwon Land, who asked not to be named as he was not authorized to speak to the media.In Australia, Star Chairman John O’Neill said: “This is a unique environment and one beyond our control in which we’re determined to balance the necessary measures needed to protect the business while considering the considerable human impact to our workforce.”last_img read more

PFA ups exposure to local enterprise

first_imgDanish pension fund PFA said it is increasing its exposure to small and medium-sized enterprises (SMEs) in Denmark by raising its stake in Kirk & Thoresen Invest.PFA — the country’s largest commercial pensions provider — said it decided to boost its ownership stake in the private equity firm to 30% from 16%. A PFA spokesman declined to say how much the investment would cost.Henrik Heideby, managing director of the £417bn pensions company, said: “For a long time we have wanted to support small and medium-sized businesses more and therefore the thousands of Danish jobs that are a part of Danish economic life.” Heideby already sits on the board of Kirk & Thoresen Invest, which has holdings in library supplier Biblioeksmedier, air purifier, Lesni, and supplier of native and exotic meats, Dencon, amongst others.Apart from increasing its stake in the firm, PFA said it was also making a loan facility available to Kirk & Thoresen. “We don’t have the set up internally in PFA to screen the market to see which of these smaller companies have the necessary potential,” Heideby said.“Apart from that, these types of investment often require you as the investor to give concrete leadership and economic advice to the businesses concerned,” he said.PFA did not have the set up to act as a business doctor, he said.Heideby said the pension company’s desire to support SMEs was not driven by idealism.“We are not philanthropists, we will invest in companies we believe will give a good return,” he said.Heideby said PFA would like to make more investments of this type.“With this model I believe we, as a very big institutional investor, will also have the opportunity to work on projects that are so small that we would normally not get involved in them,” he said. PFA said it also had investments in Erhvervsinvest and SE Blue Equity, which invested in SMEs in Denmark.The Danish government has made moves to encourage the country’s pension funds to lend to SMEs since bank lending has become harder for the companies to come by as a knock-on effect of the financial crisis.At the end of last year, it extracted a pledge from the pensions industry to to promote pension fund lending to SMEs as well as working to bolster their access to capital resources.This was part of larger deal to ease the pressure on the level of reserves pension funds needed by extending a previously altered discount yield curve.last_img read more

Warriors ride Durant to beat Cavaliers and clinch NBA title

first_imgBy Rory CarrollOAKLAND, California (Reuters) – The Golden State Warriors secured their second NBA championship in three seasons with a 129-120 Game Five win over the Cleveland Cavaliers on Monday, capping a near-perfect run through the playoffs.The Warriors, who beat Cleveland in the 2015 Finals only to lose to them last year after squandering a 3-1 series lead, went a record-setting 16-1 in the playoffs, their only loss coming in Game Four of the best-of-seven championship.The win provided redemption for the Warriors, who brought Kevin Durant over from the Oklahoma City Thunder last offseason to bolster their already high-powered offence.Durant, who lost in his only previous Finals appearance in 2012, led the way for the Warriors with 39 points and was relieved after feeling pressure to deliver prior to the game.“I couldn’t sleep for two days,” Durant, who was named the Finals MVP, said during an on-court interview. “I was anxious, I was jittery.“I just wanted to lay it all out there. I put in work. I just had to trust in it. We were really good tonight.”`Cavaliers forward LeBron James had a game-high 41 points and guard Kyrie Irving hit tough shots all night but defensive breakdowns by Cleveland led to easy baskets late in the game for the Warriors, igniting a deafening crowd.James said he had no reason to feel sorry for himself.“I left everything on the floor every game, all five games,” he said. “I have no reason to put my head down.”Warriors point guard Stephen Curry said the experience of losing last year’s Finals served them well this season.“We learned from everything we’ve been through,” Curry said during the trophy celebration.“To be back here and bring gold Larry (O’Brien trophy) back home, I’m just excited to be a part of this group and accomplish something special. I’m ready to do it again.”An unprecedented third straight Finals clash between the Warriors and Cavaliers was hyped as the ultimate championship rubber match and expected to be the antidote for a postseason that had little in the way of drama.But that idea fizzled fast when the Warriors opened with a pair of lopsided wins at home, fought back late to steal the next game in Cleveland and then, after dropping their first game of the postseason, closed out the series at home.In the end, the Cavaliers simply did not have enough top-class talent to topple the Warriors, even with four-time league MVP James doing all he could to keep his team in it.For James, already a three-time champion, the loss puts him in rare company as only the fourth player to come up short in five NBA Finals.Cleveland’s inability to give the Warriors much of a fight has already sparked talk that James, who left the team in 2010 for Miami before returning four years later, could consider another move during 2018 free agency.last_img