According to Deutsche Bank analyst Carlo Santarelli, Chinese New Year visitation to Macao is now down 69%, with Day 4 bringing an 84% 
plunge. Santarelli’s opposite number at JP Morgan, analyst Joseph Greff countered that “There’s value for those who are patient.” He began by noting a 16% falloff in shares of MGM Resorts International, Melco Resorts & Entertainment, Las Vegas Sands and Wynn Resorts. He observed that “a very harsh [cash flow] impact is already being reflected at current levels, and thus we have some level of reasonable confidence that there are values to pick through in the recent carnage.” In other words, Buy Now. (Especially Melco.)
Ironically, Melco has taken the smallest cash-flow hit (15%) and MGM the worst (41%). While MGM stock has only slid 12%, compared to 20% for Melco and 17% for Wynn, “the downward move for MGM as particularly punitive … though the company is being given an opportunity here to buy back a sizable chunk of its own stock.” With exquisite 
understatement, Greff observed that “Chinese New Year visitation to Macau has not been encouraging.” Why? New Year tourism “has historically not been closely correlated” with gross gaming revenue. “We note that ~1/3 of Golden Week visitation to Macau occurs during the latter four days of the week, so we will stay tuned for further updates (though it’s hard to imagine the data is likely to positively inflect in the next four days).”
The consensus opinion, generally speaking, is that we’re unlikely to have a rerun of the SARS epidemic, if only because the government of China was quicker to react this time around and has handled the matter with greater transparency. But while the Chinese government has tried to curb the movement of its citizens, particularly out of “hot zone” Wuhan, carrier Air China decided to bust out a weekend flash sale: $399 for a round-trip from JFK International to Shanghai. Yes, please, fly me to a coronavirus-infected city, so long as I can get a good price for it.
So far Macao casinos have avoided forced closure, although Chief Executive Ho Iat Seng repeatedly brandishes the threat, adding that in the case of a coronavirus outbreak no one would go to a casino anyway.” (Wanna bet?) Seng has gone so far as to order casino staff to wear surgical 
masks, which must be a rather ghoulish sight. The virus has been a boon to mask manufacturers, who are seeing prices skyrocket. Chinese officials have ordered 20 million of them, which is going to make somebody very rich. Macao’s loss may be Las Vegas‘ gain. It’s reported that Chinese players are heading for Sin City instead. According to Wynn Resorts, “Although as of this date there are no reported cases of the coronavirus in Las Vegas that we are aware of, we will be in close contact with the Southern Nevada Health District who is monitoring the situation along with the [Centers for Disease Control].”
In spite of the Chinese government getting out in front of the coronavirus problem, economic impact is feared to be $40 billion, the same as in the SARS crisis. Gambling economies dependent on Chinese VIP play, like Singapore and the Philippines are fearing the coronavirus pinch, as the disease continues to spread like wildfire. Countries reporting cases now number Thailand, Taiwan, Japan, South Korea, Vietnam, Singapore, Malaysia, Nepal, France, Canada and Australia. Here at home, coronavirus has been reported in Washington State, California, Chicago and Arizona. The virus is a ‘gateway disease’ to pneumonia and, as a former two-time pneumonia sufferer I can tell you that’s one life-threatening diagnosis you don’t want to get.
* Several leading casino companies are tipped as potential buyers of DraftKings, even as the sports-betting giant continues to lose money hand over fist. With incoming CEO Tom Reeg talking about shedding Internet 
casinos and sports-betting operations, Caesars Entertainment appears to be out, as is MGM, which has plenty of sports-betting irons in the fire already. However, Las Vegas Sands and Wynn Resorts have plenty of cash on hand to finance a DraftKings takeover. Given Sands’ lack of diversification, the match might not make much sense but if Massachusetts ever gets around to legalizing sports betting, Wynn is indecently well positioned to capitalize.
* The horsey set is up in arms about the prospect of Class III casinos in Virginia. Not because it would threaten the tracks, but because it would rechannel revenue from tracks’ ‘historical racing’ parlors, with their slot-
like betting on old races. Huffed Colonial Downs COO Aaron Gomes, “Colonial Downs Group and Peninsula Pacific Entertainment have been in the gaming industry for over 20 years and in our experience, no state has ever expanded gaming without giving consideration to an incumbent gaming operator, especially one who has invested $300 million, delivered tens of millions in tax revenues to the state and its localities and created more than 1,000 new jobs.” If historical-racing parlors crumple under casino-based competition it represents an existential threat to racetrack subsidies, which are part of the 22.5% tax rate paid by the racinos, and you can expect a hue and cry whenever the underwriting of the Sport of Kings is menaced.
* Betfred USA is a sports-betting operator on the move. In one week it has inked deals with Wind Creek Bethlehem and now with Grand Falls Casino & Golf Resort. It’s now eying Colorado, newest state to approve sports wagers and where Betfred already has a pact with Saratoga Casino Black Hawk. It’s a company to watch.
* Americans like to patronize casinos (2.5 times a year) but not as much as they go to the library. Women are more literate than men, but the latter go to casinos more often (3.4X a year) than do the ladies (1.7X). Now if a casino incorporated a library …
