The day that (some) casinos closed | Hato one year after

Gaming revenue declined month-on-month in August 2017 from MOP22.7 billion to MOP23 billion in July. In September, revenues fell again: it is impossible to dissociate these results from the passage of Typhoon Hato. Several investment analysts have estimated that Macau lost approximately six percentage points of growth in casino gross gaming revenue in August as a result of the typhoon.

“When catastrophic Typhoon Hato struck Macau it caused serious flooding and damage to many industries including the gaming sector. The power outages caused by Hato affected many homes, small and medium enterprises, and also casinos. The majority of casinos were affected for a short period of time, while only few were more adversely affected and needed to be closed,” according to Gaming Inspection and Co-ordination Bureau (DICJ) information supplied to Macau Business. “According to DICJ records, as of 4th September 2017 the casinos and slot machine halls that still remained closed due to damage caused by Typhoon Hato only included Casino Legend Palace, Casino Broadway and Mocha Inner Harbour.”

Of these three, it is worth highlighting what happened at Legend Palace, inaugurated just six months earlier. Because it was closest to the sea it was one of the biggest victims of the floods, needing more time to recover from the damage.

“The majority of casinos were affected for a short period of time, while only few were more adversely affected and needed to be closed” – DICJ

Meanwhile, one of the casinos most affected by the tropical storm was not on the DICJ list – Ponte 16, located in a badly affected district of the Inner Harbour.

“Success Universe Group [owner of 49 per cent of a joint venture with SJM] shared a loss of the associates relating to Ponte 16, for the year ended December 31, 2017 which was mainly due to the performance of Ponte 16 being adversely affected by Super Typhoon Hato in August 2017 and the increase in the loss of the group’s travel business,” Success Universe reported in a filing.

In general, all casinos suffered from Hato – with those on the Peninsula suffering more than those on COTAI. The least affected were those only suffering energy losses. In some cases these outages led to the disruption of operation. A blackout hit the whole of the MSAR at 12:24pm, with energy gradually restored but authorities prioritising residences.

This day saw casinos close their doors and hotels fail to accept new customers, although many tried everything they could to continue to function, offering heavy discounts on room rates and fine dining, struggling to regain business – it was the first time we had seen empty casino halls in Macau!

This despite the directive issued that afternoon by the DICJ: “In order to ensure that games in casinos are conducted fairly and honestly and also to ensure the safety of persons, the DICJ has ordered casinos affected by electricity cuts to suspend gambling activities and provide the necessary help to people inside the casinos.”

A few days later, DICJ “conducted a review of the internal procedures of the gaming concessionaires regarding casino operations during the crisis, as well as the Bureau’s internal supervision procedures in crisis situations,” the Bureau told Macau Business.

“To better prepare for crisis situations in the future, one of the enhanced measures that the DICJ has adopted is to establish an emergency communication mechanism with the six gaming concessionaires so that should a crisis arise (e.g.) typhoon, electricity, water shortage etc., there is adequate communication between the parties and measures can be taken in a timely [manner] to protect the order and safety of gaming employees and visitors in the casinos.”

We did not have to wait too long to test this new mechanism: when typhoon Pakhar struck Macau on 15th October 2017 “the above-mentioned communication mechanism was used and positive results were seen,” also states DICJ. Last June, the government launched a public consultation on a draft legislation that, if approved, would allow the special administrative region’s Chief Executive to order the closure of border check points and casinos in the event of “unforeseen public incidents.”

Fewer tourists visited Macau in late August: visitor arrivals dipped 0.6 per cent year-on-year to 2.86 million, according to the Macau Statistics and Census Service. In month-on-month terms, visitor arrivals fell 1.8 per cent.

“The typhoon showed that there is still a great distance between Macau and a world level tourism leisure centre across all domains, such as infrastructure, warning systems, and handling of crises,” concludes Hao Yufan, Dean of the Faculty of Social Sciences at the University of Macau.


Millions in donations

The six Macau gaming operators received a barrage of criticism from the population because – in some cases, at least – they put corporate interests ahead of the personal needs of their employees . . . although they were quick to respond in donating funds towards the city’s clean-up and reconstruction.

Sands China Ltd. said that it donated MOP65 million to assist with long-term relief, recovery and rebuilding efforts in Macau (MOP30 million from Sands China and MOP35 million from the Adelson Family Foundation.)

According to other reports in local media Galaxy founder Lui Che-woo committed MOP60 million from his company and family foundation.

Pansy and Lawrence Ho also made donations in that order of magnitude with a combined MOP60 million from their MGM, MGM China and Melco Resorts & Entertainment. Hundreds of Melco volunteers also joined efforts to clean up the city.

Wynn Resorts donated MOP30 million, while junket operator Suncity Group announced that it had donated MOP5 million to affected families.

N.b: List not exhaustive