Covid-19 has claimed another casino casualty in the form of Resorts Casino Tunica. Ironically, the Penn National Gaming closure comes after 
an abortive March which promised to exceed the 2019 in Mississippi. Overall gaming revenues were at $110 million when play was aborted on March 16, a 48% stumble from last year ($212 million). Gaming-tax collections will be 36% down in March and squat this month. Mississippi Gaming & Hospitality Association Executive Director Larry Gregory remained stoic, saying, “We’ve dealt with the BP oil spill, Mississippi River flooding, and the most memorable, Hurricane Katrina. We are coping, as most businesses are doing now, optimistic that one day this crisis will come to an end.
As for Penn, it’s drawn out its revolving credit, giving it $730 million cash on hand. In its current, reduced state, Penn burns through $83 million a month, rents included. JP Morgan analyst Joseph Greff wrote that “we estimate that PENN has enough liquidity to survive through most of November … absent a bounce back in demand later in the year as regional casinos experience what will likely be some staggering of 
openings, PENN will need to find fresh liquidity, which we think is available, much like other gaming, lodging, and leisure companies have been finding out.” For instance, lenders have already waived covenants that require Penn to have X, Y or Z amount of cash on hand. The ‘sale’ (more like giveaway) of Tropicana Las Vegas has closed and Gaming & Leisure Properties Inc. has turned around and started shopping the Trop. Good luck in this market. According to Greff, Penn “will receive 75% of net proceeds above $307.5m (plus certain taxes, expenses, costs), and if an agreement is entered during the second year of the sale process, PENN will receive 50% of proceeds.” On a happier note, Barstool is on time and budget for a third-quarter rollout of sports betting, while Penn’s geographical diversification gives it an advantage in any phased reopening of the economy as it has no more than 15% exposure to any one state.
* It will be a long road back for Encore Boston Harbor. (Already Massachusetts schools have been closed through the end of the academic year, so we’re looking at a prolonged lockdown.) The Boston Globe reports that “With Europe and China also in trouble, Massachusetts won’t 
be getting much of a lift from exports or international travelers … In Massachusetts, this downturn will be particularly painful and the recovery slower than usual, according to business leaders and economists.” The pandemic is not only laying waste to the school system but also to the state’s renowned medical sector, as the Coronavirus scythe aims primarily at the elderly and indigent. Forget ‘medical tourism’ for the time being. “Historically, recessions have been good for medicine overall,” said Dr. Eric Dickson, CEO of UMass Memorial Health Care. “That’s just not the case with this one.”
From there, the outsized ripple effect extends to revenue-drivers like restaurants and sports, with unemployment projected to reach 18% by June, not returning to pre-pandemic levels for two years. “Boston typically does weather recessions better than the rest of the country 
because it has industries that are less cyclical,” Moody’s Analytics economist Mark Zahdi told the Globe, “In this particular case, probably not. … It’s going to be a slog.” According to the Globe, “Massachusetts has the highest per-capita income among states, fueled in part by stock-based compensation among the professional class and income from investment portfolios.” Factor in the Coronavirus economy and discretionary spending will be heading south. The National Association for Business Economics consensus projection is for a 26.5% contraction in the economy. As venture capitalist Maia Heymann observes, “We have to train a new set of muscles, which is sustained survivability.”
* Speaking of hard hits, Crown Resorts took one when the Australian government closed all casinos. 95% of Crown staff have been let go, with full-time and part-time staff receiving severance, exclusive of senior management, while “casual staff” will receive a $630 lump sum. Crown CEO Ken Barton called the layoffs a “tough but necessary decision.”
* As for tough decisions, when casinos reopen if patrons don’t practice social distance and other circumspect behavior, they could share the fate of the passengers on Carnival Cruise Lines‘ Grand Princess. The ship had a Covid-19 outbreak at sea, not least because guests were allowed to party hearty while the pathogen spread. It didn’t help that CCL staff waited 43 hours to tell them. “The more you travel with them, the more goodies they give you,” said one passenger. “It’s like rats and cocaine.” Scarier still, CCL owner Micky Arison is one of the people tasked by the White House with reopening the economy, not unlike putting the fox in charge of the hen house.
* Add card clubs to the list of establishments squeezed by the Small Business Administration‘s prohibition on aid to minor establishments that derive more than 50% of their revenue from gambling. That ban—and the temporary closure of card rooms in California—is claiming collateral damage to two gambling-addicted cities. Hawaiian Gardens and Bell 
Gardens are experiencing budget shortfalls from loss of card-derived tax revenue. In the case of Hawaiian Gardens, it’s a catastrophic 70% of the civic budget. “Without the help of [Paycheck Protection Program] funding, California’s gaming operators, all of which voluntarily ceased operations in mid-March, will be forced to permanently lay off employees and some may not be able to reopen,” wrote California Gaming Association prexy Kyle Kirkland. No dice. There is still one hail-Mary pass that card rooms (and the cities dependent on them) can lob: That is to ask Gov. Gavin Newsom (D) to unlock some of the $97 million surplus in gaming-regulatory funding and fertilize the gaming economy with it.
* If you don’t mind snorkeling or scuba diving, you can check out the ancient Roman version of ‘What happens here, stays here’ off the shore of Baia, Italy. It was the anything-goes spa playground of the elite, with Nero and Cicero among its party animals. However, it met a series of inglorious ends, including being sacked by Muslims in the 8th century and eventually being undermined by the volcanic vents that once fed its healing springs. But don’t be deterred, vacationers. Bust out your flippers and have a gander.
