Goodbye, girls, and don’t you cry. We’ll be home soon. By Ken Adams, CDC Gaming Reports November 23, 2020 at 12:30 am This year is a moment of punctuated equilibrium, an era-defining event, like the world wars and Great Depression of the last century. Starting in March, the gaming industry, like most other industries in the country, was on lockdown. The economy literally came to a sudden, shocking halt. Business managers, politicians, Wall Street analysts, and ordinary citizens tried to predict when the economy would open up again. In June, the process began. The reopening did not happen at the same time or in the same way in every state; understandably, perhaps, each state had its own unique criteria and model for reopening. But whatever the conditions, reopening was seen as the first step to economic recovery. It was assumed then that the virus was on its way to becoming contained, and that as a result, life would begin working back toward normal. The belief then, that the pandemic would be short lived, and that normal life would return quickly, was reminiscent of the early days of World War I. In those days, every country had its parades and celebrations. Young men marched confidently to the recruiting office and then to the railway line. Bands played, girls lined up to kiss the young men, flags waved, and people celebrated their patriotism. The mood was one of enthusiasm and confidence, backed by the belief that the war would be short. Everyone was certain their side would win a glorious victory and that their sons would be home in a few weeks or months, at most. And afterward, everyone would return to pre-war ways, with things reverting to how they’d been, as though the war had been nothing more than a long, unpleasant weekend. This fantasy was almost immediately proven to be nonsense. There was no victory and no glory. It was a war waged in trenches dug in featureless mud, it dragged on, pointlessly, for years, and millions of young men died for what amounted to nothing: climbing out of the trenches, dogging the bullets, barbed wire, and landmines, capturing a small piece of ground a few hundred yards away, thousands dying in the process, and then soon thereafter watching the other side charge back over that same ground to recapture the same meaningless hill. Message on the Caesars Palace marquee on May 15, 2020/ Photo by Howard Stutz In the end, there were no winners, just piles of dead. Those that survived and came home were changed: no longer innocent, idealistic, patriotic, or enthusiastic, and wounded in body and spirit. But even if they had returned the same person they were when they marched off to war, it likely wouldn’t have mattered, since the place they’d left was no longer the same, either. The entire culture of western Europe and Russia changed in those years of war, and the survivors had to find new ways to live in the changed world. Fashion, businesses, modes of transportation, entertainment, and social mores were different. In the United States, we had speakeasies, bathtub gin, flappers, jazz and jazz cigarettes, cars, radios, weekends, and movies. The war also marked the beginning of a vast migration away from farms and rural communities to cities. The process took two decades, but by the end of World War II, America was no longer an agrarian state. It had become a nation of cities, big industries, and mass media. It would be a stretch to compare the current pandemic to a world war, of course, but some similarities nevertheless exist. Emotionally, the initial stages of the coronavirus have been somewhat analogous to the first world war. Like those people, we thought it would be a short battle: businesses would close for a while, and everyone would work from home, wear masks, and practice social distancing, and then, after a month or two of those measures, the virus would be contained, the business would reopen, the economy would pick back up, and life would return to normal. Now, eight months into the pandemic, it is clear that, for a variety of reasons, this will not be a short war. Much like the charges and countercharges of WWI – gain an inch, lose an inch – the country is experiencing openings and closings one after another. Several vaccines have lately been announced, giving rise to the hope that the virus will be contained in time. Still, it probably will take another year before the restrictions are unilaterally lifted. There have been too many false starts. The casinos in Detroit closed in March. In August they reopened with capacity restricted to 15 percent. In November they closed again for at least three months. The same thing has happened in Illinois and in some cities in Pennsylvania. For free-standing restaurants, bars, gyms, barbershops, and theaters it has been worse. Hard-fought battles to reopen, implement all of the necessary health practices, and win back customers, disappear overnight as the virus charges back. Those casinos that have reopened and remained open are changed. They have new operating models; they operate with fewer employees and less product. Several of the major hotels in Las Vegas are closing midweek and only open on weekends. Restaurants, bars, lounges, and entertainment facilities are either closed or operating on a limited basis; the ubiquitous buffet has seemingly followed the dodo bird into extinction. Restaurants have moved outside, and most retail outlets have developed delivery services. As profound as those changes are, there is another even more profound change taking place – the country is moving, clearly and inexorably, into cyberspace. The trend is not new, but it has gained significant momentum during the pandemic, Online commerce has been growing rapidly year over year since Amazon and other online retailers learned to exploit their advantages. The online retailers have a price advantage because of a leaner, more efficient structure. They have developed superior delivery models; and the consumers are at home, at the retailers’ figurative fingertips. Black Friday is coming up, but with the capacity restrictions and fear of public exposure, it is not likely to be the day retailers go into the black for the year. Instead, just as they have been doing all year during the lockdown and its concomitant closures, shoppers will be shopping online. And it is not just retail. Wherever it is legal, gamblers are also going online in larger numbers. The trend is just beginning. It will expand. And the expansion will be aided by the pandemic. It is a major societal change. The online social shift underway may not be as large as when rural America moved to the cities, but it will be significant. Like that societal change, it will take a long time to complete. In gaming, the shift requires legislative approval. In the past, approval was not easy to obtain. Now, in the wake of a pandemic induced recession, lawmakers are going to be looking for new revenue sources. Online gaming is a good candidate. And while it does not promise the investment or employment of traditional casino gaming, it can offer significant tax revenues; that will probably be enough to tip the scales in favor of legalizing online gaming in many states. The long-term impact on the gaming industry will be significant. The end of the pandemic is still in the future. There are more disruptions, restrictions, and challenges ahead, and it is impossible to predict how it will all play out. But it is possible to predict two things: this is not going to be a short war, and when it is finally over, society will have been changed in profound and permanent ways. And that includes the gaming industry, in all its many forms.