The spread of COVID-19 and the resulting shutdown of casinos across the United States put the cash reserves of major resort companies in Las Vegas to the brink.
Earlier in 2020, Nevada Gov. Steve Sisolak ordered a 30-day closure for all businesses, turning the famous Strip, home of the most recognizable hotel-casinos in the world, into a virtual ghost town.
As the pandemic spread and the number of those infected grew, the element of the unknown raised intriguing and necessary questions within this tourist-dependent industry.
Survival of the Fittest
How long could a land based casino last with no revenue? Depending on who you ask the answer will vary.
After extensively crunching the numbers, some industry analysts suggested companies like MGM Resorts International and Caesars Entertainment have enough money that they could survive as long as 6 to 18 months with no casinos operating.
Wynn Resorts and Las Vegas Sands, two casinos with a huge gaming presence in China, both have 15-20 months of cash available. That gives them a bit more cushion while being in a more volatile market.
A report was released at the start of the pandemic about the details on just how much cash these casino companies were burning every day with no vacationers visiting properties – and how long they could stay closed without running out of money was detailed.
It ranged from only five months to over a year and a half, due to obligations they have to the banks, to their employees and to other projects.
The Fallout of COVID-19
Every month that the booming Nevada gambling industry was shut down, there were nearly $5 billion in estimated economic losses, according to the American Gaming Association.
The fallout was arguably even more devastating on a national level. AGA president Bill Miller said earlier this year:
“In total, these mass closures will rob the U.S. economy of $43.5 billion in economic activity if American casinos remain closed for the next eight weeks,”
Earlier in 2020, casinos were lining up to ask Congress for emergency funds to bail the industry out of financial free-fall as the pandemic battered tourism markets across the United States and the globe. The industry sought possibilities that would include direct cash payments, deferred taxes, or special bankruptcy protections, according to the Washington Post. Miller said:
“Gaming employees, their families, and communities are bearing the brunt of this economic standstill and will continue to suffer if Congress and the administration don’t take immediate action,”
The Nevada Gaming Control Board then adopted rules for what opening casinos looked like.
How Does Casino Gaming Look Now?
When Caesar’s, Wynn, MGM, and the other casino operators were finally able to reopen their Las Vegas casinos, they were forced to operate at half capacity. That’s wasn’t exactly a problem, as few people are currently traveling and that’s not likely to change at least until far into the future.
Most casinos have to adhere to strict rules about how many players can play at the same time at many casino table games.
The adopted rules are as follows:
- 3 players per blackjack table
- 4 players per roulette table
- 4 players per poker table
- 6 players per craps table
Limited seating has been a problem when it comes to poker, as four-handed games are in general not profitable for players or the casino.
While there’s a definite need to reduce the amount of players for safety’s sake, the key seems to be finding a balance between visitors well being and economic sustainability.
Casinos had to submit a plan to the NGCB at least seven days before their opening, according to the final published guidelines. Before opening, casino hotels had to clean and disinfect all surfaces according to Centers for Disease Control (CDC) guidelines.
Employees had to also be trained on CDC disinfecting procedures, and how to prevent the spread of infectious disease, including, without limitation, social distancing, hand washing, and not spreading germs at work.
Once the plans were approved, casinos must also:
- Post signs throughout the property on proper hygiene, including proper handwashing, how to cover coughs and sneezes, and to avoid touching their face.
- Instruct workers to stay home if they are sick.
- Report on co-workers showing COVID-19 symptoms.
- Conduct additional cleaning and disinfecting throughout the day.
- Require employees to wash their hands.
- Provide personal protective equipment (masks and gloves) for workers.
The casino operators also have to ensure social distancing protocols at slot machines and other games (like video poker). That could involve signage, removing some seats, rearranging machines, or even turning some off.
Hotels and other public spaces will also have to meet social distancing requirements. That includes meeting and convention spaces, as well as pools, where seating will have to be arranged to allow for social distancing.
A New Casino Landscape
It’s very likely that casinos will continue to struggle due to the economic impact of COVID-19, but the big three will certainly see more success. These necessary precautions very closely mimic the ones being used in Macau, where casino openings have already happened.
This isn’t a complete return to normal, but it’s a baby step toward that. In theory, this will help Caesar’s, Wynn, and MGM cut their losses and bring back more than a few eager customers.
It will, however, be a very slow journey.
It is far too early to be able to say what the future of casino gaming will look like. I know that there are a lot of people hurting because they are not able to work.
Fortunately, there are also a large group of people that are in desperate need for a getaway. The distraction of a casino trip would most certainly be beneficial to both groups.
I don’t know when the right time to get back to business as usual is, that’s above my pay grade. However, I do believe that the sooner we are all able to resume our lives, safely, the better. It definitely looks like we are closer and closer to that scenario by the day.
In these uncertain times, I am completely confident in one thing; the resilience of the human race. Gamble on.