Even if the gaming industry were to receive the all-clear tomorrow to reopen casinos and resorts closed by the coronavirus pandemic, there wouldn’t be throngs of customers waiting at the at the entrances. The cloud of COVID-19 will be hovering above the surface.
It may remain that way well into the (USA) summer months.
While professional sports leagues are debating restarting their suspended seasons without fans in the stadiums, the nation’s casino industry doesn’t want to reopen its nearly 1,000 idle commercial and tribal casinos minus the properties’ loyal customers.
MGM Resorts International acting CEO Bill Hornbuckle said last week the company will only reopen its nearly two dozen gaming and non-gaming resorts in six states “when it is safe.”
Deutsche Bank gaming analyst Carlo Santarelli speculated Tuesday that Wynn Resorts and Las Vegas Sands – both of which have, commendably, committed to paying their combined 25,000 employees during the closure – will open their Las Vegas Strip properties “as soon as they are able.” Other Strip resorts are expected to “open in a staggered fashion to try to balance supply with demand.”
Still, Santarelli and other analysts believe it will be June before there is any “uptake of demand.”
Nevada’s state-ordered casino closure, initially expected to end April 15, was extended last week by Governor Steve Sisolak until at least April 30. No one will be surprised if the closures are extended into May.
Even when the casinos do reopen, the social distancing measures currently in place – such as limits on crowd size and patron proximity to one another – may well be continued. That may not be a problem if everyone, patrons and employees alike, are required to wear protective masks. Customers may also have to have their temperatures screened before entering the property.
Jefferies gaming analyst David Katz said in a research note Sunday that any reopening, most likely in June, could limit the number of seats per table game and require space restrictions between slot machines.
“We note that it is reasonable to expect that reopening is uneven by state and property, which would warrant adjustments which are unknowable at present,” Katz said. “We further assume a more normalized, but more modest, operating level beginning in the fourth quarter of 2020 and (continuing) through 2021.”
These types of health safeguards are currently taking place at casinos in Macau, nearly three months after the coronavirus pandemic reached the capital of Asian gaming and caused not only the suspension of the lucrative Chinese New Year celebrations but an outright closure of all casinos for 15 days during February.
Given its numbers since, the Macau market might as well remain shuttered. The travel restrictions and social distancing measures still in place have kept most visitors away.
Macau gaming revenues fell 11.3% in January, 87.8% in February, and 79.9% in March, and analysts have said April gaming revenues are down nearly 90% after just one week.
The investment community doesn’t believe the U.S. casino market will face such draconian numbers once it reopens. Many insiders have speculated that regional gaming properties, tribal gaming, and locals-oriented casinos – such as the resorts outside of the Strip that cater to Las Vegas residents – will have a quicker recovery than destination resort markets.
Still, many analysts have said they won’t be surprised to see cash flows anywhere between 50% and 60% below projections. It all depends on how quickly gaming customers feel comfortable, whether traveling or just going out into a crowd again.
Las Vegas, which attracted 42.5 million visitors and produced $6.587 billion in gaming revenue in 2019, is already working to bring back business.
MGM Resorts posted a 38-second video to Twitter yesterday that featured entertainers, sports stars and celebrity chefs reassuring viewers that they will be welcomed back to Las Vegas as soon as possible. On Tuesday, Sahara Las Vegas posted a message on its website telling customers that the resort “looks forward to welcoming you back when our doors re-open on May 1, 2020,” and saying that it had again begun accepting reservations.
Sahara General Manager Paul Hobson said in an emailed statement that the resort will adjust its plans on the guidance of the governor and public health officials.
“While eager to welcome team members and guests back to the property, their health and well-being is our top priority and the resort will remain temporarily closed until given guidelines that it is safe and recommended to re-open,” Hobson said. “Resort leadership anticipates a phased re-opening following the conclusion of the mandatory closure. We are certain both team members and guests will be excited to return.”
Source: By Howard Stutz, Executive Editor, CDC Gaming Reports https://www.cdcgamingreports.com/commentaries/open-for-business-dont-expect-busy-gaming-floors-when-the-casino-industry-restarts/