Why the Crown (ASX:CWN) share price could be hit harder than others today

ASX stocks are already facing a tough start but the Crown Resorts Ltd (ASX: CWN) share price could be hit harder with the new WA COVID lockdown

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ASX stocks are already facing a tough start this morning but the Crown Resorts Ltd (ASX: CWN) share price could be hit harder than most.

The futures market is pricing in a 0.5% drop in the S&P/ASX 200 Index (Index:^AXJO) when trade kicks off on the first day of the new month.

But the flash COVID-19 lockdown in Perth is claiming an early victim with Crown reporting that its Perth Casino will have to cease most operations.

CWN share price catching new WA COVID lockdown bug

Management said that from 31 January till 5 February, it will close all gaming activities as well as food outlets. This means banqueting and conference facilities will also be shuttered and Crown's food venues will only serve takeaway.

Its hotel accommodation business can continue to operate, but at a reduced capacity.

Crown had been hit hard by the stage four lockdown in Victoria – regarded as the toughest in the Western world.

Why the COVID lockdown could get a lot worse

What might also worry Crown investors is speculation that the five-day lockdown imposed by the McGowan government may last a lot longer.

The warning comes from Australian Medical Association president Omar Khorshid that was reported on Nine News.

If the hotel quarantine security guard at the centre of the outbreak scare has already  passed on the infection, the state will need more than five days to get the situation under control.

"If it has already spread, it will be longer than five days. It will be significantly longer," Dr Khorshid told Nine.

"You have to go to the people who test positives, to their contacts, to work out where they have been. As we have seen in every other state. The real test will be the five days. Does anybody test positive? If they do, we are in for a much longer battle here in West Australia."

Impact on other ASX stocks

If the virus is out of control, CWN won't be the only ASX stock to be impacted by the WA COVID lockdown. The Fortescue Metals Group Limited (ASX: FMG) share price and Rio Tinto Limited (ASX: RIO) share price are also likely to come under pressure if worksite restrictions are imposed.

We are still some ways from that and it's hard to imagine we could become Brazil, but it's a risk to be aware of.

COVID isn't the biggest challenge for CWN shareholders

The outbreak in the "fortress state" of Western Australia is the latest challenge hitting the problem-laden CWN share price.

The highly anticipated report from New South Wales Inquiry is expected to be handed to authorities today, reported the West Australian.

The Inquiry was examining if Crown is fit to be holding a gaming license in the state and the revelations during the process is damning.

But the public may need to wait for another two weeks to find out the details of the investigation.

COVID isn't the biggest threat facing CWN shareholders.

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Motley Fool contributor Brendon Lau owns shares of Fortescue Metals Group Limited  and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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