By Josh Resnek
Wynn Resorts flagship casino and hotel in Macau has been temporarily closed down due to the spread of the Coronavirus now sweeping China.
If the spread of the virus continues unabated, this could pose difficult cash flow problems for Wynn.
Macau is a short distance from the Chinese border.
Before the casino and hotel closed, visitor traffic had disappeared.
Wynn officials, in statements to the press, indicated that the closure is costing about $2.6 million a day.
Wynn CEO Matt Maddox said the company has enough money on hand to endure a long closure.
He made a promise to pay all the Macau casino and hotel employees even though the facility is now closed.
“Our employees are the first people we need to take care of,” Maddox told the press.
The Coronavirus continues to spread throughout the world, with cases now being reported in dozens of countries and on-board giant cruise ships.
Massachusetts has reported several cases of the virus, but to date, the spread of the virus here is not worrisome to public health officials.
Chinese officials have reported 40,000 cases of the virus in China.
Nine-hundred people have died in China to this date in time from the virus.
Flights in and out of China have been seriously curtailed. China has closed down to the outside world.
Chinese industry has been brought to a stop.
The media is bombarded with photographs of Wuhan, the city of 10 million, where the virus began and is believed to be centered.
Photographs reveal empty streets and shuttered businesses in major cities throughout China and even in Beijing.
The closure of the Macau facility could have a very serious effect on Wynn’s earnings in the next quarter.
Earnings and income were down during the last reported quarter. The Macau facility produces almost 70% of Wynn’s total income. It is the engine that drives the worldwide gambling empire built by former Wynn CEO Steve Wynn.
Despite a very successful gaming and hotel operation in Las Vegas, Wynn’s largest contributor to the company pot is in Macau.
The Everett Encore facility is not yet standing on its own as the company comes to term with adjusting to the local business environment by testing what works and doing away with what doesn’t.
If Macau remains shut for a much longer period, it will naturally impact the company’s cash position and might ultimately lead to a slowdown in how the company meets its obligations.
Everett officials are watching the situation with interest.
If the virus arrives here affecting large numbers of Massachusetts residents it could have a negative effect on earnings at the casino and hotel.
Right now, Chinese visitors to the United States have dropped off to a trickle.
The Chinese are the largest members of the United States tourist base. Asians flock to the casino as a rule.
Experts are predicting the virus will have a negative effect on all economies, including the local economy.