Vegas vs. virus II; Illinois, Maryland rally

Two presumed cases of coronavirus have been reported in Nevada. What’s the over/under on when panic sets in? Me, I’m contemplating a trip back to Las Vegas in the near future, so I’m working on my sangfroid. As one
tourist told the Los Angeles Times, “Fewer people means shorter lines.” I’m not sure the casinos see it that way. Then again, it would be nice if we didn’t have a repetition of their cavalier attitude toward the Great Recession. (“Shut up and play,” infamously counseled MGM Resorts International.) For now there are no signs of a Macao-style mass avoidance of the Las Vegas Strip, which speaks well to consumer confidence and the circumspection of local authorities. Still, as historian David G. Schwartz counsels, “The magnitude has yet to be seen.” And we’re already seeing downward pressure on room rates: A Sunday-night stay at the Flamingo has a base rate of $9 for Caesars Rewards members. At least Las Vegans don’t have to live in virus magnets like this.

Said one cabbie, “I used to wait only around 25 minutes to pick people up at the airport. Recently, I’ve been waiting 45 minutes.” The casino industry is taking a more proactive approach to healthy public spaces but “Those on the front lines—housekeepers, janitors, managers, dealers, promoters—have been told to implement stricter hygienic measures in a clandestine manner so as not to scare visitors.” Is the industry conducting itself with the necessary transparency? According to an LAT source, “secrecy in the name of protecting business interest has always remained a top priority.”

For the time being, Las Vegas can continue to bank on hardcore customers, whether it’s the man who likes smaller crowds anyway, to the slot player who boasts, “I can beat it! I can beat anything! I have a high metabolism.” Let’s hope he’s right.

In Massachusetts, meanwhile, it appears to be business as usual for Encore Boston Harbor and MGM Springfield even though coronavirus manifested itself in that region sooner. “Analysts say both companies have a lot of cash that they can use to help them during a downturn.” That’s good for planned capex at both properties. Some argue that the Bay State casinos will actually become more important to MGM and Wynn Resorts as their Macao revenues wither. SunTrust Robinson Humphrey analyst Barry Jonas is among those finding a silver lining, telling the Boston Globe, “The spending is done. Maybe there are plans down the road for some select expansions, but for now, I think the ramp likely has more to do with marketing campaigns, advertising approaches.”

Both companies are emphasizing their “highest standards for health and safety.” Since coronavirus has been contained in Massachusetts to date, the casinos have little to fear at the moment. Should the disease go wide, though, its’s Katy bar the door. “Whether that’s schools, sporting events―any sort of meeting places, I think we’d have a lot more to worry about,” said Jonas. “For now, we’re not seeing that level of panic. But we need to monitor this closely to see if it gets worse from here.”

While we have not been fans of the federal government’s coronavirus-response priorities (more tax cuts?!?), we have to give an attaboy to Donald Trump for his george gesture of donating $100,000 in presidential salary toward efforts to battle the outbreak. Here’s hoping other philanthropists step up to the plate. However … could a taxpayer-funded bailout of Trump International Las Vegas be in the works? Some think so.

* Meanwhile, in flyover country, gambling revenues were up 5% last month in Illinois. There was an extra weekend day, aiding a $102 million gross. Also, it compares favorably with February 2019’s sickly -6.5%. (Enjoy it while you can, guys: March has *two* fewer weekend days than last year.) Over one-third of the state’s revenue was booked by Rivers Casino Des Plaines, grossing $36 million and rocketing 21% upward. Eldorado Resorts eked out a 1.5% gain at Grand Victoria, coming in at $12 million. Only Harrah’s Metropolis—vaulting 47% to $5.5 million—was also revenue-positive. Empress Joliet ceded 4.5% to $8 million and Hollywood Aurora was down 4%, also to $8 million. Harrah’s Joliet slipped 5% to $13 million, while Par-A-Dice stumbled 13% to $5 million. Jumer’s Casino Rock Island was down 5% to $5 million, Argosy Belle slid 7% to $3 million and Casino Queen tumbled 11% to $6.5 million.

* Maryland staged a rally of its own, jumping 10.5% to $151 million. MGM National Harbor led the field with $61 million, a 13% increase. Slots were up 11% and table win jumped 17%. Maryland Live grossed $55 million, a 19% leap, while Horseshoe Baltimore goes from bad to worse, its $18 million a 13% falloff. JP Morgan analysts were projecting outlying casinos to have a flat trajectory but they’re all outperforming expectations. Hollywood Perryville was up 10% to $7 million, while Churchill Downs‘ little Ocean Downs gained 4% to $6 million. Out west, Golden Entertainment‘s Rocky Gap Casino grossed $5 million, an 11.5% bump. Despite strong table win (up 18%), West Virginia casinos were looking at a 4% revenue decrease, as slots slid 8%. Charles Town Races bucked the trend, up 3% despite 6% less slot win, as it cleaned up at the tables, winning 49% more. Those were some extraordinarily unlucky table players.