Casinos face their biggest bet

Today, Macau is expected to finish mass testing its 600,000 residents for Covid

While it is hoped that life will then be able to begin returning to normal, that remains an uncertainty.

Even bigger is the uncertainty facing Macau's numerous casino operators - official licensees and their affiliated partners. If residents are hopeful that things may be okay again once mass testing is done, the wait is far from over for the casinos.

In the short term, the pandemic situation over there and in the mainland will continue to be cause for uncertainty. Social distancing restrictions and periodic lockdowns have already led to a sharp fall in gaming revenues for the enclave.

In the long term, Beijing's policy on capital cross-border movement will be a major variable.

Before the two big uncertainties are clarified, casino operators will have no choice but to bet with the authorities.

That's ironic, isn't it?

When they bet with the rich and punters from other walks of life, it's always a sure win, which allows them to plow in a fortune for the operators themselves and the Macau government.

It is estimated that as much as 80 percent of the Macau government's income is derived from gaming revenues.

In the midst of uncertainties in betting with authorities - thus politics - stakes are high and the odds are not necessarily in their favor.

Over the weekend, two more so-called satellite casinos - those affiliated with major licensees but which do not hold the licenses themselves - were reported to have shut down.

Altogether, there are six major gaming-license holders in Macau, namely Sands China, MGM China, Wynn Macau, Galaxy Entertainment, Melco and SJM Holdings.

As mass testing of Macau residents continued and local businesses closed, their stock prices plunged too.

Casinos were allowed to remain open, but there were no punters.

Last month, gaming revenues stood at a little more than 3.3 billion patacas, which was 68 percent less than the same month period a year ago, to average 550 million patacas per license holder.

It is more likely than not that the performance in June will be worse as a result of the lockdowns following the current outbreak, in which at least 36 people tested positive.

In January, the Macau government said it was amending the gaming law setting new rules for all casino operators.

Current holders will have to bid for new licenses through a tender process based on new terms if they want to continue to run their businesses after their licenses expire this year.

That promises to be a huge bet - probably the biggest bet these gaming czars have ever had - unless the major areas of uncertainty are clarified.

For one, how long will the zero or dynamic zero Covid policy last?

More significantly, will Beijing open the border to let mainlanders - including the big spenders - swamp Macau for sightseeing and, crucially, gambling?

Some smaller affiliates have been overcome by the seemingly endless wait and already quit. The rest are also desperate for greater clarity on the policies.