Las Vegas slides toward crisis as market tanks

Coronavirus having been officially been declared a pandemic by the World Health Organization, it was only a matter of time before the impact hit Las Vegas. Not much time, either. Late yesterday, the National Association of Broadcasters pulled the plug on its April convocation, scheduled for the Las Vegas Strip. “We knew that if we could not deliver on … expectations, we would not move forward. More importantly, keeping the community safe and healthy is NAB’s highest priority; therefore, we are deferring to the developing consensus from public health authorities on the challenges posed by coronavirus,” wrote CEO Gordon H. Smith, hinting at a possible online version of the NAB show. As convention cancellations go, this is a biggie and other dominos are now certain to topple.

Wall Street tumbled into bear-market territory, with markets plagued with uncertainty over what measures the federal government would take and how great they would be. (Trading was halted today for the second time this week.) It remains to be seen whether they will heed the advice of a high-ranking federal official who said, ‘‘This is not a financial crisis. This just a temporary moment of time that we will overcome together as a nation and as a world.’’ Then again, the attending physician to the U.S. Congress projects a minimum of 70 million cases nationwide. “The government probably should have been thinking about stimulus last month,” said Invesco Chief Global Market Strategist Kristina Hooper. “Every day that passes makes the economic impact of coronavirus that much worse.” J.P. Morgan Private Bank‘s Patrick Schaffer predicted weeks of a “whiplash” market. Added Commonwealth Financial Network CIO Brad McMillan, ‘‘There’s a real feeling that we don’t know where this ends.”

Gaming stocks got hammered. As of this moment, Las Vegas Sands is -10%, Boyd Gaming -20% (The Street obviously expects bad things for the Las Vegas locals market), Station Casinos -21%, Wynn Resorts -10%, Eldorado Resorts -27% (!), Caesars Entertainment -15.5%, MGM Resorts International -11% and Twin River Holdings -10%. Relatively unscathed was Melco Resorts & Entertainment, down only 3%. One possible interpretation is that Macanese casinos are viewed as less of a risk at the moment than domestic ones. We know if we were Caesars shareholders we’d want greater compensation in light of Eldorado’s newly emaciated stock price. An attendee at a March 5-8 conference at The Mirage has tested “presumptive positive” for coronavirus, making the Strip’s first megaresort also its first Covid-19 “hot zone.” MGM is sending out an appeal to other attendees of the affected Women of Power Summit.

Farther afield, MGM’s Yonkers Raceway was closed Tuesday after a veteran trainer died of coronavirus. The track is only six miles from hot zone New Rochelle.

The National Basketball Association, in a move of extreme gravity, suspended its season after a Utah Jazz player (believed to be Rudy Gobert) tested positive for Covid-19. Aside from the tremendous ramifications for the sports world, this kneecaps the sports-betting industry (which just kicked off this week in Illinois and Michigan). That’s billions of dollars in handle down the tubes, although punters needing a placebo will always have daily fantasy sports. There’s seemingly no situation that DraftKings and FanDuel can’t turn to advantage.

Miami Heat Coach Erik Spoelstra said, “I think the league moved appropriately and prudently, and we’ll all just have to monitor the situation and see where it goes from here.’’ Added Charlotte Hornets Coach James Borrego, “These are scary times.” Word. In the world of college basketball, March Madness will continue (a break for sports bettors) but will play to near-empty arenas. As National Institute of Allergy & Infectious Diseases Director Anthony Fauci told Congress, “We would recommend that there not be large crowds. If that means not having any people in the audience when the NBA plays, so be it. But as a public health official, anything that has crowds is something that would give a risk to spread.”

What does that mean for gaming? Nothing good. In California, Gov. Gavin Newsom (D) has recommended the cancellation of any gathering of 250 people or more. Where do large groups of people traditionally congregate? You guessed it: casinos. As Newsom put it, “gatherings held in venues that do not allow social distancing of six feet per person should be postponed or canceled.” Sounds a lot like the precautions currently being taken in Macao. In further bad news for the resort industry, Donald Trump clamped down on all travel between the U.S. and Europe for the next month due to the “foreign virus.” (Major aspects of the speech were almost immediately retracted.) Only the United Kingdom and Ireland are exempt, although some Trump critics say that the U.K. is where Covid-19 is ramping up the fastest now.

Trump will be staying close to home next week (including nixing a trip to Nevada, standing up Sheldon Adelson), and Tom Hanks and Rita Wilson may be wishing they did, after becoming coronavirus’ most famous victims whilst overseas. Still, there are those who say the government is closing the door after the horse fled, such as Georgetown University‘s Lawrence Gostin, who said more focus needed to placed on domestic ramifications, tweeting that coronavirus “is already here; germs don’t respect borders.” Added CMC Markets Michael McCarthy, “The market judgement on that announcement is that it’s too little too late.”

Trump—a member of the highest-risk demographic, incidentally—continues to urge tapping money normally set aside for entitlement programs but appears to have gone off his previous calls for tax relief for the leisure industry. That groan you heard was from the American Gaming Association. Time will tell. (A Civiqs poll shows that Baby Boomers are the demographic least worried about Covid-19, even though they are the most at risk. Since they are also casinos’ bread-and-butter demographic this should be cause for concern, to put it mildly.)

* Kangwon Land, the only South Korea casino open to citizens, is bleeding red ink from coronavirus. Initially closed on Feb. 23 on a strictly precautionary basis, the casino has seen its shutdown extended from Feb. 26 to Feb. 29 to March 9 and now to March 16. It expects to lose approximately $70 million from the shutdown.

* This just in … Brazil President Jair Bolsonaro, after calling coronavirus “a fantasy,” has tested positive for Covid-19. Normally we’d say ‘Karma’s a bitch’ and leave it at that but he dined with Donald Trump and Mike Pence last Saturday at Mar-a-Lago, so we hope the White House has some testing kits handy. (Given the gravity of the crisis, should Trump and Pence even be in the same place at the same time? Just wondering.)