The coronavirus epidemic has had a chilling effect on the casino industry in Southeast Asia, and Las Vegas may soon see the same. On March 5, casino stocks began to tumble as the financial markets reacted negatively to the spread of the COVID-19 virus to Nevada.
The first patient in Nevada has now tested positive for the coronavirus virus. A man in his 50s has been hospitalized and is in isolation in southern Nevada. He had reportedly traveled to Washington State, where it is speculated that he had contracted the virus.
This news was devastating for casino operator stocks. Early in the day, it was reported that the Red Rock Resorts shares fell by 11.3% to $17.03. As the day went along, Red Rock Resorts stock continued to decline, decreasing 13.86% to $16.53. MGM Resorts International shares also saw a significant drop as the stock market opened, falling 8.7% to $21.28, then fell another 3% to $20.60.
Other stocks saw a sharp decline as well. Boyd Gaming dropped 9.3% to $22.43. Wynn Resorts Ltd fell 9.5% to $95.62. Las Vegas Sands saw the smallest decline, falling 4.14% to $54.88.
By Thursday afternoon, the Dow Jones Industrial average had dropped by nearly a thousand points, almost completely erasing Wednesday’s 1200-point rise.
“We expect markets to remain volatile,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. “The unfolding nature of the coronavirus threat—both real and perceived—is not yet quantifiable, and, as such, the current global policy response can’t immediately be judged as sufficient or insufficient for restoring investor confidence in the short term.”
While Las Vegas casinos are bracing for more bad news, Macau and South Korea are still dealing with the devastating impact coronavirus brings. Macau casinos were forced to close their facilities for 15 days, which resulted in an 87.8% year over year reduction in revenue for February.
In South Korea, the country’s largest casino Kangwon Land, the only casino in South Korea where local residents can legally gamble, shut down on February 23 and is scheduled to remain closed until March 9. It is expected that this will cost the casino about $50 million in lost revenue.
