With the exception of brave outliers Las Vegas Sands and Westgate Las Vegas, most casinos in Sin City are reacting to the resurgence of Covid-19 by doing … nothing. There’s a ‘been there, done that‘ attitude toward crisis-period measures like requiring guests to wear masks or stepping up hotel sanitization (one recent guest to Harrah’s Las Vegas says his room was cleaned once in four days). “Where we sit right now with the information we know, that’s the best approach, for each operator to evaluate their own situations,” said industry apologist Josh Swissman. “It really comes down to what makes the customers feel comfortable.” And if that means sickness and death, isn’t that the cost of doing business in Las Vegas? About the only hammer that could be deployed to motivate a robust response would be new safety mandates from the Nevada Gaming Control Board and we don’t seem to be at that desperate juncture yet. (Operative word “yet.”)
The dollars-over-sense attitude is best embodied by consultant Brendan Bussman, who told the Las Vegas Review-Journal, “We are still early on in the recovery and a potential setback with rising cases would limit our current trajectory. The meetings, incentives, conventions and exhibitions business is just starting to bounce back and we still need to bring back the international segment. At this point, it is about personal responsibility to keep this recovery pushing forward.” For gosh sakes, let’s not let a pandemic get in the way of a nascent economic recovery, shall we? Indeed, even without action by the private sector, Coronavirus could snuff Nevada‘s comeback as swiftly as it began. “We did not anticipate recording gaming win in excess of $1 billion in three consecutive months, let alone set an all-time monthly record in May,” said NGCB senior economist Michael Lawton, who noted that a $1 billion-plus June (highly probable) would be a hot streak unmatched in 13 years.
It’s understandable to a degree why no one wants to spoil the party, what with hotel occupancies at 62.5% midweek and 88% on weekends. Las Vegas remains an accessible and (to some extent) affordable domestic travel destination. As Nevadans balk at getting vaccinated however, they put their own economy at risk. It’s already a ‘hot zone’ and not because of 120-degree temperatures. Sin City can’t afford to be a no-go place once again. You’d really think this would motivate people to do something to avert disaster but as long as the cash register keeps ringing it’s more profitable to look the other way. As UNLV‘s Amanda Belarmino observed, “Unfortunately, an uptick in cases will most likely result in reduced tourism, reduced revenue and a return to restrictions.” (Not necessarily in that order, in our opinion.)
A few are questioning how sustainable the U.S. gaming economy’s prodigious growth will be. Is it a mirage? What happens when people blow through the last of their stimulus money and unemployment checks run out? At the moment, we seem to be at least a quarter away from that eventuality. (Whatever happens, American casinos are certain to do better than Macao ones.) At least one thing better is coming out of Covid-19: The emergence of a kinder, gentler workplace, one in which the employee is sometimes right, not the (abusive) customer.
And never count out Americans for Nonsmokers Rights when it sees a chance to stump for smoke-free casinos. Citing a misinterpreted reading of June’s gaming revenues in Atlantic City, ANR President Cynthia Hallett said they afford “the latest evidence that smoke-free is good for business.” Now Hallett is trying to leverage Major League Baseball into a Nevada campaign, writing that “As it currently stands, only two franchises, the Cardinals and Royals, are located in cities that allow smoking inside of casinos. As you continue your consideration of Las Vegas or other cities as new home cities for the Athletics or other MLB teams, we hope you will contribute to creating safe environments in communities that host MLB franchises.” It’s a stretch but, given the chokehold smokers have on Silver State casinos, it’s worth a try.
It hardly seems coincidental that two of the three states with the healthiest Internet gambling are struggling in the terrestrial realm. Deutsche Bank analyst Carlo Santarelli made this point last week and subsequent disclosures have only borne him out. Case in point, Pennsylvania. Last month it was down 13%% against 2019. Some of this may be dilution attributable to two new Cordish Gaming casinos but that hardly seems the whole story. Of a statewide gross of $260.5 million, $183.5 million was lost at the slots (-16%) although tables ($77.5 million) were only 3% off. I-gaming, meanwhile, raked in $90 million.
In the crowded Philadelphia market, Philadelphia Live‘s $19 million bested Rivers Philadelphia‘s $18.5 million (-24%), the primary victim of the new entrant. Harrah’s Philadelphia plunged 27% to $15.5 million and Valley Forge Casino Resort was down 4.5% to $10.5 million. Unruffled by such competitive pressures, Parx Casino gained 7.5% to $53 million, undefeated and still the champ. Over in Pittsburgh, both Rivers Pittsburgh ($27 million, -11%) and The Meadows ($14.5 million, -30%) felt the chomp of Pittsburgh Live ($8 million). Aside from Parx, no casino in the state was revenue-positive measured against 2019. Wind Creek Bethelehem grossed $35 million but fell 19%. Mohegan Sun at Pocono Downs brought home $16.5 million, a 9% slippage, Hollywood Penn National also grossed $16.5 million but tumbled 18.5% and Presque Isle Downs slid 16.5% to $9 million. That left Mount Airy, hanging in there at $15.5 million, only 2.5% down, as well as Lady Luck Nemacolin, down 21% to $2 million, which is evidently enough to pay the bills.
As for the Internet casinos, Hollywood Casino’s bevy of skins (DraftKings, Barstool Sports, BetMGM) won it $35 million. Next was Rush Street Interactive‘s $23 million, followed by FanDuel‘s $15 million and FoxBet‘s $6 million. Sports betting netted $34 million, thanks to $8 million in promotional outlays. FanDuel’s $17 million gave it pride of place, then came DraftKings, way behind with $6 million, Rush Street’s $3 million and Barstool’s $2 million.
Jottings: Four Navajo Nation casinos, including Twin Arrows Resort near Flagstaff, have reopened after a 15-month, Coronavirus-motivated shutdown. Some health precautions, however, remain in place … In a strange twist of events, Hard Rock Cincinnati has covered all its signage with black sheeting, even the big guitar marquee. The casino claims there’s nothing to worry about, the revelation of the signage was “a sneak peak” and all will be well by autumn … Resorts World Catskills got a negative review from Fitch Ratings, mainly due to high leverage and attenuated cash flow. On the upside, capex isn’t needed and cash on hand should cover operations and interest payments on the casino’s (substantial) debt … Heightened anti-Covid-19 measures in Clark County collided head-on with the gaming industry’s first big trade show of the year, National Indian Gaming Association, which opened yesterday. The expo will mark the debut of much-anticipated Caesars Forum. 5,000 attendees are expected … After only a year on the job, Las Vegas Sands‘ Singapore viceroy, Andrew MacDonald, has abruptly retired. According to reporter Andrew Scott, MacDonald “is widely acknowledged as arguably the most knowledgeable casino executive in the world when it comes to understanding the mathematics, dynamics and profitability of casino gaming.”
Quote of the Day: “Getting in at this juncture would be fraught with risk. A go-it-alone strategy in today’s dynamic market would be difficult and acquiring an existing sports betting/iGaming operator would be very expensive based on current valuations.”—Bernstein Research, on Las Vegas Sands‘ tentative exploration of digital gambling.
relative to it’s small size, Valley Forge seems to be doing ok. Valley Forge and Nemacolin are technically ‘Resort’ casinos, that were originally required to charge a membership or daily entry fee (now gone). Pittsburgh Live is the first, and so far the only small ‘satellite’ casino built.
I am sure you know that LA county has re-imposed its mandatory mask requirement indoors. CA’s infection rate is climbing very fast, as is NV’s. I was supposed to be in Vegas next week, but have cancelled. All those unvaccinated people in close quarters, even though I am fully vaccinated, is not something I wish to subject myself or my wife to. We can still get Covid, and supposedly it will not be severe or even evident, but I do not want to be one of the 2% that can get it and still end up dead. I predict that in the next 2 weeks, Vegas goes back to mask mandates. And social distancing again, until this Delta variant runs it’s course. Part of the big issue is we got vaccinated, with the expectation that we would never need our masks. The trust factor is pretty shot also. Many believe that the vaccines were never any good, and now with the mask requirement, they really think the vaccines are junk. Many think they are dangerous, and there is no trust in either the daily new case rates in CA and anywhere else. We will see where it goes. I expect to see the vaccination rate plummet now.
I guess it’s just the new normal, death and hospitalizations are simply the price the public has to pay, trying to prevent them are just too costly and difficult to have to deal with for these gaming businesses… Power on. Until you can’t. Then deal with the issues… I used to think Las Vegas Casino/Resorts would support customers having to prove they are vaccinated for entry, that was really dumb of me, they just want to soak every customer dry right freaking now, they are putting near zero effort to making the city look safe for the pending conventions comeback. At least in the old days the Mafia cared about the customer/consumer, They played the long game more, they never would have allowed their businesses to give people the impression that they don’t care about your safety. Corporations are satisfied as long as they have enough customers, the customers have sent them the message that enough of them exist to keep the lights on. The only way this changes is if the people themselves stop coming.